Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. The distinction between a "merger" and an "acquisition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations.

Look up merger in Wiktionary, the free dictionary.

Acquisition[link]

An acquisition is the purchase of one business or company by another company or other business entity. Consolidation occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies survives independently. Acquisitions are divided into "private" and "public" acquisitions, depending on whether the acquireee or merging company (also termed a target) is or is not listed on public stock markets. An additional dimension or categorization consists of whether an acquisition is friendly or hostile.

Achieving acquisition success has proven to be very difficult, while various studies have shown that 50% of acquisitions were unsuccessful.^[1] The acquisition process is very complex, with many dimensions influencing its outcome.^[2]

Whether a purchase is perceived as being a "friendly" one or a "hostile" depends significantly on how the proposed acquisition is communicated to and perceived by the target company's board of directors, employees and shareholders. It is normal for M&A deal communications to take place in a so-called 'confidentiality bubble' wherein the flow of information is restricted pursuant to confidentiality agreements.^[3] In the case of a friendly transaction, the companies cooperate in negotiations; in the case of a hostile deal, the board and/or management of the target is unwilling to be bought or the target's board has no prior knowledge of the offer. Hostile acquisitions can, and often do, ultimately become "friendly", as the acquiror secures endorsement of the transaction from the board of the acquiree company. This usually requires an improvement in the terms of the offer and/or through negotiation.

"Acquisition" usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger and/or longer-established company and retain the name of the latter for the post-acquisition combined entity. This is known as a reverse takeover. Another type of acquisition is the reverse merger, a form of transaction that enables a private company to be publicly listed in a relatively short time frame. A reverse merger occurs when a privately held company (often one that has strong prospects and is eager to raise financing) buys a publicly listed shell company, usually one with no business and limited assets.^[4]

There are also a variety of structures used in securing control over the assets of a company, which have different tax and regulatory implications:

This unreferenced section requires citations to ensure verifiability.

• The buyer buys the shares, and therefore control, of the target company being purchased. Ownership control of the company in turn conveys effective control over the assets of the company, but since the company is acquired intact as a going concern, this form of transaction carries with it all of the liabilities accrued by that business over its past and all of the risks that company faces in its commercial environment.
• The buyer buys the assets of the target company. The cash the target receives from the sell-off is paid back to its shareholders by dividend or through liquidation. This type of transaction leaves the target company as an empty shell, if the buyer buys out the entire assets. A buyer often structures the transaction as an asset purchase to "cherry-pick" the assets that it wants and leave out the assets and liabilities that it does not. This can be particularly important where foreseeable liabilities may include future, unquantified damage awards such as those that could arise from litigation over defective products, employee benefits or terminations, or environmental damage. A disadvantage of this structure is the tax that many jurisdictions, particularly outside the United States, impose on transfers of the individual assets, whereas stock transactions can frequently be structured as like-kind exchanges or other arrangements that are tax-free or tax-neutral, both to the buyer and to the seller's shareholders.

The terms "demerger", "spin-off" and "spin-out" are sometimes used to indicate a situation where one company splits into two, generating a second company which may or may not become separately listed on a stock exchange.

As per knowledge-based views, firms can generate greater values through the retention of knowledge-based resources which they generate and integrate. Extracting technological benefits during and after acquisition is ever challenging issue because of organizational differences. Based on the content analysis of seven interviews authors concluded five following components for their grounded model of acquisition:

1. Improper documentation and changing implicit knowledge makes it difficult to share information during acquisition.
2. For acquired firm symbolic and cultural independence which is the base of technology and capabilities are more important than administrative independence.
3. Detailed knowledge exchange and integrations are difficult when the acquired firm is large and high performing.
4. Management of executives from acquired firm is critical in terms of promotions and pay incentives to utilize their talent and value their expertise.
5. Transfer of technologies and capabilities are most difficult task to manage because of complications of acquisition implementation. The risk of losing implicit knowledge is always associated with the fast pace acquisition.

Preservation of tacit knowledge, employees and literature are always delicate during and after acquisition. Strategic management of all these resources is a very important factor for a successful acquisition.

Increase in acquisitions in our global business environment has pushed us to evaluate the key stake holders of acquisition very carefully before implementation. It is imperative for the acquirer to understand this relationship and apply it to its advantage. Retention is only possible when resources are exchanged and managed without affecting their independence.

Distinction between mergers and acquisitions[link]

The terms merger and acquisition mean slightly different things. The legal concept of a merger (with the resulting corporate mechanics, statutory merger or statutory consolidation, which have nothing to do with the resulting power grab as between the management of the target and the acquirer) is different from the business point of view of a "merger", which can be achieved independently of the corporate mechanics through various means such as "triangular merger", statutory merger, acquisition, etc. When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded.

In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place.For example, in the 1999 merger of Glaxo Wellcome and SmithKline Beecham, both firms ceased to exist when they merged, and a new company, GlaxoSmithKline, was created. In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Being bought out often carries negative connotations; therefore, by describing the deal euphemistically as a merger, deal makers and top managers try to make the takeover more palatable. An example of this would be the takeover of Chrysler by Daimler-Benz in 1999 which was widely referred to as a merger at the time.

A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly (that is, when the target company does not want to be purchased) it is always regarded as an acquisition.

Business valuation[link]

The five most common ways to valuate a business are

• asset valuation,
• historical earnings valuation,
• future maintainable earnings valuation,
• relative valuation (comparable company & comparable transactions),
• discounted cash flow (DCF) valuation

Professionals who value businesses generally do not use just one of these methods but a combination of some of them, as well as possibly others that are not mentioned above, in order to obtain a more accurate value. The information in the balance sheet or income statement is obtained by one of three accounting measures: a Notice to Reader, a Review Engagement or an Audit.

Accurate business valuation is one of the most important aspects of M&A as valuations like these will have a major impact on the price that a business will be sold for. Most often this information is expressed in a Letter of Opinion of Value (LOV) when the business is being valuated for interest's sake. There are other, more detailed ways of expressing the value of a business. While these reports generally get more detailed and expensive as the size of a company increases, this is not always the case as there are many complicated industries which require more attention to detail, regardless of size.

As synergy plays a large role in the valuation of acquisitions it is paramount to get the value of synergies right; synergies are different from the "sales price" valuation of the firm, as they will accrue to the buyer. The analysis should, hence be done from the acquiring firm's point of view. Synergy creating investments are started by the choice of the acquirer and therefore they are not obligatory, making them real options in essence. To include this real options aspect into analysis of acquisition targets is one interesting issue that has been studied lately^[5].

Financing M&A[link]

Mergers are generally differentiated from acquisitions partly by the way in which they are financed and partly by the relative size of the companies. Various methods of financing an M&A deal exist:

Cash[link]

Payment by cash. Such transactions are usually termed acquisitions rather than mergers because the shareholders of the target company are removed from the picture and the target comes under the (indirect) control of the bidder's shareholders.

Stock[link]

Payment in the form of the acquiring company's stock, issued to the shareholders of the acquired company at a given ratio proportional to the valuation of the latter.

Financing options[link]

There are some elements to think about when choosing the form of payment. When submitting an offer, the acquiring firm should consider other potential bidders and think strategically. The form of payment might be decisive for the seller. With pure cash deals, there is no doubt on the real value of the bid (without considering an eventual earnout). The contingency of the share payment is indeed removed. Thus, a cash offer preempts competitors better than securities. Taxes are a second element to consider and should be evaluated with the counsel of competent tax and accounting advisers. Third, with a share deal the buyer’s capital structure might be affected and the control of the buyer modified. If the issuance of shares is necessary, shareholders of the acquiring company might prevent such capital increase at the general meeting of shareholders. The risk is removed with a cash transaction. Then, the balance sheet of the buyer will be modified and the decision maker should take into account the effects on the reported financial results. For example, in a pure cash deal (financed from the company’s current account), liquidity ratios might decrease. On the other hand, in a pure stock for stock transaction (financed from the issuance of new shares), the company might show lower profitability ratios (e.g. ROA). However, economic dilution must prevail towards accounting dilution when making the choice. The form of payment and financing options are tightly linked. If the buyer pays cash, there are three main financing options:

• Cash on hand: it consumes financial slack (excess cash or unused debt capacity) and may decrease debt rating. There are no major transaction costs.
• It consumes financial slack, may decrease debt rating and increase cost of debt. Transaction costs include underwriting or closing costs of 1% to 3% of the face value.
• Issue of stock: it increases financial slack, may improve debt rating and reduce cost of debt. Transaction costs include fees for preparation of a proxy statement, an extraordinary shareholder meeting and registration.

If the buyer pays with stock, the financing possibilities are:

• Issue of stock (same effects and transaction costs as described above).
• Shares in treasury: it increases financial slack (if they don’t have to be repurchased on the market), may improve debt rating and reduce cost of debt. Transaction costs include brokerage fees if shares are repurchased in the market otherwise there are no major costs.

In general, stock will create financial flexibility. Transaction costs must also be considered but tend to have a greater impact on the payment decision for larger transactions. Finally, paying cash or with shares is a way to signal value to the other party, e.g.: buyers tend to offer stock when they believe their shares are overvalued and cash when undervalued.^[6]

Specialist M&A advisory firms[link]

Although at present the majority of M&A advice is provided by full-service investment banks, recent years have seen a rise in the prominence of specialist M&A advisers, who only provide M&A advice (and not financing). These companies are sometimes referred to as Transition companies, assisting businesses often referred to as "companies in transition." To perform these services in the US, an advisor must be a licensed broker dealer, and subject to SEC (FINRA) regulation. More information on M&A advisory firms is provided at corporate advisory.

Motives[link]

The dominant rationale used to explain M&A activity is that acquiring firms seek improved financial performance. The following motives are considered to improve financial performance:

• Economy of scale: This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit margins.
• Economy of scope: This refers to the efficiencies primarily associated with demand-side changes, such as increasing or decreasing the scope of marketing and distribution, of different types of products.
• Increased revenue or market share: This assumes that the buyer will be absorbing a major competitor and thus increase its market power (by capturing increased market share) to set prices.
• Cross-selling: For example, a bank buying a stock broker could then sell its banking products to the stock broker's customers, while the broker can sign up the bank's customers for brokerage accounts. Or, a manufacturer can acquire and sell complementary products.
• Synergy: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts.
• Taxation: A profitable company can buy a loss maker to use the target's loss as their advantage by reducing their tax liability. In the United States and many other countries, rules are in place to limit the ability of profitable companies to "shop" for loss making companies, limiting the tax motive of an acquiring company.
• Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders (see below).
• Resource transfer: resources are unevenly distributed across firms (Barney, 1991) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources.^[7]
• Vertical integration: Vertical integration occurs when an upstream and downstream firm merge (or one acquires the other). There are several reasons for this to occur. One reason is to internalise an externality problem. A common example of such an externality is double marginalization. Double marginalization occurs when both the upstream and downstream firms have monopoly power and each firm reduces output from the competitive level to the monopoly level, creating two deadweight losses. Following a merger, the vertically integrated firm can collect one deadweight loss by setting the downstream firm's output to the competitive level. This increases profits and consumer surplus. A merger that creates a vertically integrated firm can be profitable.^[8]
• Hiring: some companies use acquisitions as an alternative to the normal hiring process. This is especially common when the target is a small private company or is in the startup phase. In this case, the acquiring company simply hires the staff of the target private company, thereby acquiring its talent (if that is its main asset and appeal). The target private company simply dissolves and little legal issues are involved.^{[citation needed]}
• Absorption of similar businesses under single management: similar portfolio invested by two different mutual funds namely united money market fund and united growth and income fund, caused the management to absorb united money market fund into united growth and income fund.</ref>

However, on average and across the most commonly studied variables, acquiring firms' financial performance does not positively change as a function of their acquisition activity.^[9] Therefore, additional motives for merger and acquisition that may not add shareholder value include:

• Diversification: While this may hedge a company against a downturn in an individual industry it fails to deliver value, since it is possible for individual shareholders to achieve the same hedge by diversifying their portfolios at a much lower cost than those associated with a merger. (In his book One Up on Wall Street, Peter Lynch memorably termed this "diworseification".)
• Manager's hubris: manager's overconfidence about expected synergies from M&A which results in overpayment for the target company.
• Empire-building: Managers have larger companies to manage and hence more power.
• Manager's compensation: In the past, certain executive management teams had their payout based on the total amount of profit of the company, instead of the profit per share, which would give the team a perverse incentive to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company, the shareholders).

Effects on management[link]

Merger & Acquisitions (M&A) term explains the corporate strategy which determines the financial and long term effects of combination of two companies to create synergies or divide the existing company to gain competitive ground for independent units. A study published in the July/August 2008 issue of the Journal of Business Strategy suggests that mergers and acquisitions destroy leadership continuity in target companies’ top management teams for at least a decade following a deal. The study found that target companies lose 21 percent of their executives each year for at least 10 years following an acquisition – more than double the turnover experienced in non-merged firms.^[10] If the businesses of the acquired and acquiring companies overlap, then such turnover is to be expected; in other words, there can only be one CEO, CFO, et cetera at a time.

Different Types of M&A[link]

Types of M&A by functional roles in market[link]

The M&A process itself is a multifaceted which depends upon the type of merging companies.

- A horizontal merger is usually between two companies in the same business sector. The example of horizontal merger would be if a health cares system buys another health care system. This means that synergy can obtained through many forms including such as; increased market share, cost savings and exploring new market opportunities.

- A vertical merger represents the buying of supplier of a business. In the same example as above if a health care system buys the ambulance services from their service suppliers is an example of vertical buying. The vertical buying is aimed at reducing overhead cost of operations and economy of scale.

- Conglomerate M&A is the third form of M&A process which deals the merger between two irrelevant companies. The example of conglomerate M&A with relevance to above scenario would be if health care system buys a restaurant chain. The objective may be diversification of capital investment.

Arm's length mergers[link]

An arm's length merger is a merger: 1. approved by disinterested directors and 2. approved by disinterested stockholders:

″The two elements are complementary and not substitutes. The first element is important because the directors have the capability to act as effective and active bargaining agents, which disaggregated stockholders do not. But, because bargaining agents are not always effective or faithful, the second element is critical, because it gives the minority stockholders the opportunity to reject their agents' work. Therefore, when a merger with a controlling stockholder was: 1) negotiated and approved by a special committee of independent directors; and 2) conditioned on an affirmative vote of a majority of the minority stockholders, the business judgment standard of review should presumptively apply, and any plaintiff ought to have to plead particularized facts that, if true, support an inference that, despite the facially fair process, the merger was tainted because of fiduciary wrongdoing.″^[11]

Strategic Mergers[link]

A Strategic merger usually refers to long term strategic holding of target (Acquired) firm. This type of M&A process aims at creating synergies in the long run by increased market share, broad customer base, and corporate strength of business. A strategic acquirer may also be willing to pay a premium offer to target firm in the outlook of the synergy value created after M&A process.

M&A research and statistics for acquired organizations[link]

Given that the cost of replacing an executive can run over 100% of his or her annual salary, any investment of time and energy in re-recruitment will likely pay for itself many times over if it helps a business retain just a handful of key players that would have otherwise left.^[12]

Organizations should move rapidly to re-recruit key managers. It’s much easier to succeed with a team of quality players that you select deliberately rather than try to win a game with those who randomly show up to play.^[13]

Brand considerations[link]

Mergers and acquisitions often create brand problems, beginning with what to call the company after the transaction and going down into detail about what to do about overlapping and competing product brands. Decisions about what brand equity to write off are not inconsequential. And, given the ability for the right brand choices to drive preference and earn a price premium, the future success of a merger or acquisition depends on making wise brand choices. Brand decision-makers essentially can choose from four different approaches to dealing with naming issues, each with specific pros and cons:^[14]

1. Keep one name and discontinue the other. The strongest legacy brand with the best prospects for the future lives on. In the merger of United Airlines and Continental Airlines, the United brand will continue forward, while Continental is retired.
2. Keep one name and demote the other. The strongest name becomes the company name and the weaker one is demoted to a divisional brand or product brand. An example is Caterpillar Inc. keeping the Bucyrus International name.^[15]
3. Keep both names and use them together. Some companies try to please everyone and keep the value of both brands by using them together. This can create a unwieldy name, as in the case of PricewaterhouseCoopers, which has since changed its brand name to "PwC".
4. Discard both legacy names and adopt a totally new one. The classic example is the merger of Bell Atlantic with GTE, which became Verizon Communications. Not every merger with a new name is successful. By consolidating into YRC Worldwide, the company lost the considerable value of both Yellow Freight and Roadway Corp.

The factors influencing brand decisions in a merger or acquisition transaction can range from political to tactical. Ego can drive choice just as well as rational factors such as brand value and costs involved with changing brands.^[15]

Beyond the bigger issue of what to call the company after the transaction comes the ongoing detailed choices about what divisional, product and service brands to keep. The detailed decisions about the brand portfolio are covered under the topic brand architecture.

History of M&A[link]

The Great Merger Movement: 1895-1905[link]

The Great Merger Movement was a predominantly U.S. business phenomenon that happened from 1895 to 1905. During this time, small firms with little market share consolidated with similar firms to form large, powerful institutions that dominated their markets. It is estimated that more than 1,800 of these firms disappeared into consolidations, many of which acquired substantial shares of the markets in which they operated. The vehicle used were so-called trusts. In 1900 the value of firms acquired in mergers was 20% of GDP. In 1990 the value was only 3% and from 1998–2000 it was around 10–11% of GDP. Companies such as DuPont, US Steel, and General Electric that merged during the Great Merger Movement were able to keep their dominance in their respective sectors through 1929, and in some cases today, due to growing technological advances of their products, patents, and brand recognition by their customers. There were also other companies that held the greatest market share in 1905 but at the same time did not have the competitive advantages of the companies like DuPont and General Electric. These companies such as International Paper and American Chicle saw their market share decrease significantly by 1929 as smaller competitors joined forces with each other and provided much more competition. The companies that merged were mass producers of homogeneous goods that could exploit the efficiencies of large volume production. In addition, many of these mergers were capital-intensive. Due to high fixed costs, when demand fell, these newly-merged companies had an incentive to maintain output and reduce prices. However more often than not mergers were "quick mergers". These "quick mergers" involved mergers of companies with unrelated technology and different management. As a result, the efficiency gains associated with mergers were not present. The new and bigger company would actually face higher costs than competitors because of these technological and managerial differences. Thus, the mergers were not done to see large efficiency gains, they were in fact done because that was the trend at the time. Companies which had specific fine products, like fine writing paper, earned their profits on high margin rather than volume and took no part in Great Merger Movement.^{[citation needed]}

Short-run factors[link]

One of the major short run factors that sparked The Great Merger Movement was the desire to keep prices high. However, high prices attracted the entry of new firms into the industry who sought to take a piece of the total product. With many firms in a market, supply of the product remains high.

A major catalyst behind the Great Merger Movement was the Panic of 1893, which led to a major decline in demand for many homogeneous goods. For producers of homogeneous goods, when demand falls, these producers have more of an incentive to maintain output and cut prices, in order to spread out the high fixed costs these producers faced (i.e. lowering cost per unit) and the desire to exploit efficiencies of maximum volume production. However, during the Panic of 1893, the fall in demand led to a steep fall in prices.

Another economic model proposed by Naomi R. Lamoreaux for explaining the steep price falls is to view the involved firms acting as monopolies in their respective markets. As quasi-monopolists, firms set quantity where marginal cost equals marginal revenue and price where this quantity intersects demand. When the Panic of 1893 hit, demand fell and along with demand, the firm’s marginal revenue fell as well. Given high fixed costs, the new price was below average total cost, resulting in a loss. However, also being in a high fixed costs industry, these costs can be spread out through greater production (i.e. Higher quantity produced). To return to the quasi-monopoly model, in order for a firm to earn profit, firms would steal part of another firm’s market share by dropping their price slightly and producing to the point where higher quantity and lower price exceeded their average total cost. As other firms joined this practice, prices began falling everywhere and a price war ensued.^[16]

One strategy to keep prices high and to maintain profitability was for producers of the same good to collude with each other and form associations, also known as cartels. These cartels were thus able to raise prices right away, sometimes more than doubling prices. However, these prices set by cartels only provided a short-term solution because cartel members would cheat on each other by setting a lower price than the price set by the cartel. Also, the high price set by the cartel would encourage new firms to enter the industry and offer competitive pricing, causing prices to fall once again. As a result, these cartels did not succeed in maintaining high prices for a period of no more than a few years. The most viable solution to this problem was for firms to merge, through horizontal integration, with other top firms in the market in order to control a large market share and thus successfully set a higher price.^{[citation needed]}

Long-run factors[link]

In the long run, due to desire to keep costs low, it was advantageous for firms to merge and reduce their transportation costs thus producing and transporting from one location rather than various sites of different companies as in the past. Low transport costs, coupled with economies of scale also increased firm size by two- to fourfold during the second half of the nineteenth century. In addition, technological changes prior to the merger movement within companies increased the efficient size of plants with capital intensive assembly lines allowing for economies of scale. Thus improved technology and transportation were forerunners to the Great Merger Movement. In part due to competitors as mentioned above, and in part due to the government, however, many of these initially successful mergers were eventually dismantled. The U.S. government passed the Sherman Act in 1890, setting rules against price fixing and monopolies. Starting in the 1890s with such cases as Addyston Pipe and Steel Company v. United States, the courts attacked large companies for strategizing with others or within their own companies to maximize profits. Price fixing with competitors created a greater incentive for companies to unite and merge under one name so that they were not competitors anymore and technically not price fixing.

Merger waves[link]

The economic history has been divided into Merger Waves based on the merger activities in the business world as:^[17]

M&A objectives in more recent merger waves[link]

During the third merger wave (1965–1989), corporate marriages involved more diverse companies. Acquirers more frequently bought into different industries. Sometimes this was done to smooth out cyclical bumps, to diversify, the hope being that it would hedge an investment portfolio.

Starting in the fourth merger wave (1992–1998) and continuing today, companies are more likely to acquire in the same business, or close to it, firms that complement and strengthen an acquirer’s capacity to serve customers.

Buyers aren’t necessarily hungry for the target companies’ hard assets. Some are more interested in acquiring thoughts, methodologies, people and relationships. Paul Graham recognized this in his 2005 essay "Hiring is Obsolete", in which he theorizes that the free market is better at identifying talent, and that traditional hiring practices do not follow the principles of free market because they depend a lot upon credentials and university degrees. Graham was probably the first to identify the trend in which large companies such as Google, Yahoo! or Microsoft were choosing to acquire startups instead of hiring new recruits.^[18]

Many companies are being bought for their patents, licenses, market share, name brand, research staffs, methods, customer base, or culture. Soft capital, like this, is very perishable, fragile, and fluid. Integrating it usually takes more finesse and expertise than integrating machinery, real estate, inventory and other tangibles.^[19]

Cross-border M&A[link]

In a study conducted in 2000 by Lehman Brothers, it was found that, on average, large M&A deals cause the domestic currency of the target corporation to appreciate by 1% relative to the acquirer's local currency.

The rise of globalization has exponentially increased the necessity for MAIC Trust accounts and securities clearing services for Like-Kind Exchanges for cross-border M&A. In 1997 alone, there were over 2333 cross-border transactions, worth a total of approximately $298 billion. Due to the complicated nature of cross-border M&A, the vast majority of cross-border actions have unsuccessful as companies seek to expand their global footprint and become more agile at creating high-performing businesses and cultures across national boundaries.^{[20][citation needed]}

Even mergers of companies with headquarters in the same country are can often be considered international in scale and require MAIC custodial services. For example, when Boeing acquired McDonnell Douglas, the two American companies had to integrate operations in dozens of countries around the world (1997). This is just as true for other apparently "single country" mergers, such as the $29 billion dollar merger of Swiss drug makers Sandoz and Ciba-Geigy (now Novartis).

M&A failure[link]

Despite the goal of performance improvement, results from mergers and acquisitions (M&A) are often disappointing compared with results predicted or expected. Numerous empirical studies show high failure rates of M&A deals. Studies are mostly focused on individual determinants. A book by Thomas Straub (2007) "Reasons for frequent failure in Mergers and Acquisitions"^[21] develops a comprehensive research framework that bridges different perspectives and promotes an understanding of factors underlying M&A performance in business research and scholarship. The study should help managers in the decision making process. The first important step towards this objective is the development of a common frame of reference that spans conflicting theoretical assumptions from different perspectives. On this basis, a comprehensive framework is proposed with which to understand the origins of M&A performance better and address the problem of fragmentation by integrating the most important competing perspectives in respect of studies on M&A Furthermore according to the existing literature relevant determinants of firm performance are derived from each dimension of the model. For the dimension strategic management, the six strategic variables: market similarity, market complementarities, production operation similarity, production operation complementarities, market power, and purchasing power were identified having an important impact on M&A performance. For the dimension organizational behavior, the variables acquisition experience, relative size, and cultural differences were found to be important. Finally, relevant determinants of M&A performance from the financial field were acquisition premium, bidding process, and due diligence. Three different ways in order to best measure post M&A performance are recognized: Synergy realization, absolute performance and finally relative performance.

Employee turnover contributes to M&A failures. The turnover in target companies is double the turnover experienced in non-merged firms for the ten years following the merger.^[22]

Major M&A[link]

1990s[link]

Top 10 M&A deals worldwide by value (in mil. USD) from 1990 to 1999^[23]:

2000s[link]

Top 10 M&A deals worldwide by value (in mil. USD) from 2000 to 2010^[23]:

M&A in popular culture[link]

In the novel American Psycho the protagonist Patrick Bateman, played by Christian Bale in the film adaptation, works in mergers and acquisitions, which he once referred to as "murders and executions" to a potential victim.

In the film The Thomas Crown Affair, Thomas Crown is the CEO of a fictional mergers and acquisitions firm, called Crown Acquisitions.

See also[link]

References[link]

Further reading[link]

• DePamphilis, Donald (2008). Mergers, Acquisitions, and Other Restructuring Activities. New York: Elsevier, Academic Press. pp. 740. ISBN 978-0-12-374012-0. 
• Cartwright, Susan; Schoenberg, Richard (2006). "Thirty Years of Mergers and Acquisitions Research: Recent Advances and Future Opportunities". British Journal of Management 17 (S1): S1–S5. DOI:10.1111/j.1467-8551.2006.00475.x. 
• Harwood, I. A. (2006). "Confidentiality constraints within mergers and acquisitions: gaining insights through a 'bubble' metaphor". British Journal of Management 17 (4): 347–359. DOI:10.1111/j.1467-8551.2005.00440.x. 
• Rosenbaum, Joshua; Joshua Pearl (2009). Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions. Hoboken, NJ: John Wiley & Sons. ISBN 0-470-44220-4. 
• M&A insights: Up front – a fine balance [2]. M&A insights: Up front – a fine balance
• Fleuriet, Michel (2008). Investment Banking explained: An insider's guide to the industry. New York, NY: McGraw Hill. ISBN 978-0-07-149733-6. 
• Straub, Thomas (2007). Reasons for frequent failure in Mergers and Acquisitions: A comprehensive analysis. Wiesbaden: Deutscher Universitäts-Verlag (DUV), Gabler Edition Wissenschaft. ISBN 978-3-8350-0844-1. 
• Scott, Andy (2008). China Briefing: Mergers and Acquisitions in China (2nd ed.). 
• Aharon, D.Y., I. Gavious and R. Yosef, 2010. Stock market bubble effects on mergers and acquisitions. The Quarterly Review of Economics and Finance, 50(4): p. 456-470.

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Sam Rainsy
Leader of the Opposition of Cambodia Leader of the Sam Rainsy Party
Personal details
Born	(1949-03-10) 10 March 1949 (age 63) Phnom Penh, Cambodia
Political party	Sam Rainsy Party (1998-present) Khmer National Party (1995-1998) FUNCINPEC (1981-1994)
Spouse(s)	Tioulong Saumura
Children	Patrice Sam, Muriel Sam and Rachel Sam
Profession	Politician
Religion	Theravada Buddhism

This article contains Khmer text. Without proper rendering support, you may see question marks, boxes, or other symbols instead of Khmer script.

Sam Rainsy (Khmer: សម រង្ស៊ី IPA: [sɑːm reə̯̆ŋsiː]; born March 10, 1949) is a Cambodian politician.

Sam Rainsy was born in Phnom Penh in 1949. His father, Sam Sary was assassinated in 1959 when Sam Rainsy was ten, while his mother was thrown into prison. He moved to France in 1965, studied there and then worked as an investment manager and executive director in a variety of Parisian financial companies.^[1] He became a member of the Cambodian Funcinpec Party, and after returning to Cambodia in 1992 was elected a member of parliament for Siem Reap Province the following year. He became Minister of Finance, but was expelled from the party after losing a vote of no-confidence in 1994. In 1995, he founded the Khmer Nation Party (KNP), which changed its name before the 1998 elections to the Sam Rainsy Party (SRP) to avoid registration issues. [1] Sam was elected a member of parliament for Kompong Cham province in those elections, and the party polled 14% of the vote. In the 2003 elections, it polled 22% of the vote.

Sam went into self-exile on 3 February 2005, citing fear of arrest after a vote in the National Assembly removed parliamentary immunity from himself and fellow SRP MPs Chea Poch and Cheam Channy^[2] On that same day, Parliamentarian Cheam Channy was arrested, and detained in the Cambodian Military Prison. Sam faced multiple criminal defamation charges after accusing the Cambodian People's Party and Funcinpec of corruption in the formation of the current coalition government. He has also accused Prime Minister Hun Sen of involvement in the 22 January 2004 murder of SRP-affiliated union leader Chea Vichea.

At that time, the US Embassy in Phnom Penh said it was "deeply concerned" that the government appeared to be trying to "silence the opposition". Other embassies, local and international organizations shared the same concerns. Sam was tried in absentia on 22 December 2005 in relation to the defamation lawsuits. The court sentenced him to 18 months in prison and ordered him to pay around US$14,000 in fines and compensation. On 5 February 2006, Rainsy received a Royal Pardon by King Norodom Sihamoni at Prime Minister Hun Sen's request. He then returned to Cambodia on 10 February 2006.

In 2009, Vietnam’s foreign ministry condemned Sam Rainsy’s actions and asked the government to protect the nations’ ongoing border demarcation process. The statement called Sam Rainsy’s act “perverse, undermining common assets, violating laws of Cambodia and Vietnam, treaties, agreements and deals between the two countries”.

In October 2009, Rainsy led local residents at the Cambodia-Vietnam border in a protest against alleged Vietnamese encroachment on Cambodian territory, in which he was alleged to have encouraged villagers to uproot border markings he claimed to have been illegally placed by Vietnam. On October 25, Rainsy was charged with racial incitement and destruction of property, and the Cambodian parliament stripped Rainsy of his immunity from prosecution in November. Rainsy was issued a summons to appear in court for a hearing. On January 1, 2010, the Svay Rieng provincial court issued an arrest warrant for Rainsy after he failed to appear in court. Rainsy is currently in Australia, and says that he will let the court try him In absentia, as the charges against him are politically motivated.^[3]

Family[link]

Sam Rainsy's father, Sam Sary had served as a minister in the Education, planning and finance portfolios before becoming a Deputy Prime Minister in Sihanouk's government in the 1950s. Sam Rainsy's grandfather, Sam Nhean had served as the President of the Royal Council of Canbodia and was a prominent member of the Democratic Party (Cambodia) in the 1940s.^[1] Sam Rainsy is married to Tioulong Samura, who is also member of parliament for his current party, and has three children: Patrice Sam, Muriel Sam and Rachel Sam. Tioulong Samura's father, Nhiek Tioulong was a military general who founded the Khmer Renovation party and briefly served as an Acting Prime Minister in 1962. Both Sam Rainsy and his wife claimed to having Chinese ancestry, the former having revealed that his great-great grandfather was a Chinese immigrant,^[4] while Nhiek Tioulong revealed that he had a Chinese grandfather during a dialogue session with Zhou Enlai in 1954.^[5]

University degrees[link]

• Business Administration (Master of Business Administration from INSEAD - Fontainebleau - France) - 1980.
• Accounting (Diplôme d'Etudes Comptables Supérieures issued by the French Ministry of Education) - 1979.
• Economics (Maîtrise + Diplôme d'Etudes Supérieures de Sciences Economiques de la Faculté de Droit et des Sciences Economiques de Paris) - 1973.
• Political Science (Diplôme de l'Institut d'Etudes Politiques de Paris) - 1971.

Footnotes[link]

Bibliography[link]

• Brown, MacAlister Brown; Zasloff, Joseph Jermiah; Cambodia Confounds the Peacemakers, 1979-1998, Cornell University Press, 1998, ISBN 0801435366

External links[link]

• Sam Rainsy Party homepage
• BBC profile of Rainsy
• BBC: "Cambodia opposition calls on king"
• BBC: "Sam Rainsy appeal on Cambodia"

Dana White
Born	(1969-07-28) July 28, 1969 (age 42) Manchester, CT, U.S.
Residence	Las Vegas, Nevada
Nationality	American
Occupation	President
Known for	Managing The Ultimate Fighting Championship
Style	Boxercise [1]
Net worth	US$150 million (2010)[2]
Height	5 ft 11 in
Spouse	Anne
Children	3

Dana White (born July 28, 1969) is the current President of the Ultimate Fighting Championship (UFC), a mixed martial arts organization based in the United States.

Biography[link]

Born in Manchester, Connecticut on July 28, 1969, White grew up in Las Vegas, Nevada, Ware, Massachusetts and Levant, Maine. White is a passionate Boston Red Sox fan. During his youth, he bounced back and forth between Boston and Maine. He attended the University of Massachusetts Boston but did not finish; however, while there he did launch a boxing program for inner-city youth.^[3]

White has a background as an aerobics instructor. In 1992, White established Dana White Enterprises in Las Vegas. He conducted aerobics classes at three gyms^[4] in the Las Vegas area and began managing MMA fighters Tito Ortiz and Chuck Liddell.

While working as a manager, White learned that Semaphore Entertainment Group, the parent company of the UFC, was looking for a buyer for the UFC. White contacted childhood friend Lorenzo Fertitta, an executive at Station Casinos, and a former commissioner of the Nevada State Athletic Commission. Within a month, Lorenzo and his older brother Frank bought the UFC, with White installed as its president.^[5] White currently owns about 9% of Zuffa, LLC, the entity the Fertitta brothers created to own and manage the UFC.^[3]

White failed to comment on a potential network broadcast deal at the UFC 136 press conference. The next day it was confirmed that the UFC and Fox broadcast networks had made a multiple year deal.^[6]

Controversy[link]

Loretta Hunt[link]

On April 1, 2009, White was videotaped in a verbal tirade against Loretta Hunt, a sportswriter for Sherdog, in response to an article she wrote. In the video posted on his YouTube account, White used derogatory language in an obscenity-laced rant. The video was pulled from his official UFC YouTube page but has been widely republished across the internet and come under fire, including by GLAAD for his use of anti-gay slurs.^[7][8][9] White would later apologize for his slurs. He specifically did not include Hunt in the apology.^[10] Hunt responded by saying "I stand by the story. It's accurate."^{[citation needed]}

Miguel Torres[link]

In December of 2011, White cut fighter Miguel Torres from the UFC after Torres tweeted "If a rape van was called a surprise van, more women wouldn’t mind going for rides in them. Everyone likes surprises." In an interview with Sports Illustrated confirming Torres' firing over the controversial remarks, White claimed "Now there's no explanation for that. There's absolutely nothing I could say to make any sense of that. And the fact that he even thinks that's funny or that's a joke, it disturbs me. It bothers me." The firing of Torres immediately sparked controversy after it was revealed that White did not similarly punish two fighters of greater marquee value – Forrest Griffin and Rashad Evans, both of whom have fought in the main event of multiple Pay-Per-View cards and the latter slated to fight in the main event of a fight card scheduled to air on the FOX network on January 28, 2012 – for making similarly offensive remarks:^[11] Griffin commenting that "Rape is the new missionary"^[12] and Evans evoking the recent child abuse scandal involving Penn State University while promoting a fight.^[13] Torres has since re-signed with the UFC after having a talk with Dana.

Charity[link]

In December 2010 White donated $50,000 to the Fransisco Espinoza foundation. White donated approximately $8,000 to help pay for the brain tumor treatment of two-year-old British girl, Ruby Owen. The young girl's family had described themselves as being "shocked and over the moon". Ruby Owen's uncle, being a UFC fan had contacted White via email and asked if he could help by donating to the Ruby Owen fund raising website. White and Owen have never officially met.^[14] In an act of compassion towards a fan, he gave $300 to one man without hesitation who said that he "just received a speeding ticket while racing across town to meet him".^[15] Shortly after being named 2009 Nevada Sportsman of The Year, White added $100,000 from his pocket to the $250,000 total raised for the fund raising marathon sponsored by ESPN Radio 1100 for Las Vegas.^[16]

Feud with M-1 Global[link]

After signing negotiations with M-1 Global Russian Heavyweight MMA fighter Fedor Emelianenko fell through in 2009,^[17] White and the UFC became the subject of debate and criticism from fans and experts alike. On several occasions, White referred to Emelianenko as "a fake, a phony and a farce.^[18][19]

On June 26th, 2010 following Emelianenko's first legitimate defeat of his career to Brazilian Jiu-Jitsu ace Fabricio Werdum, White shared a simple ":)" via Twitter.^[20] The same symbol was expressed by White following Emelianenko's 2nd round doctor stoppage loss to Antonio "Bigfoot" Silva in the opening round of the 2011 Strikeforce GP.^[21] White followed this with an insult to Fedor's manager and M-1 Global President Vadim Finkelstein.^[22] This began a war of words on the social networking site. M-1 Global’s director of operations, Evgeni Kogan, stood up for Finkelstein and invited White to repeat his words to Finkelstein in person. When fans attempted to reason with White, they were met with similar contempt and insults.^[23]

There is controversy over whether Fedor Emelianenko and White have actually met.^[24] White has claimed to have met Emelianenko on a "crazy island in the middle of nowhere".^[25] In 2011, Emelianenko denied that this encounter ever took place.^[26]

Personal life[link]

White and his wife have two sons and a daughter.^[27] He is an atheist, and has stated that he is "fascinated" by religion.^[28]

Accomplishments[link]

• Nevada Sportsman of the Year (2009)^[29]
• Wrestling Observer Newsletter Awards
  • Promoter of the Year (2005–2011/present)^[30][31]
• World MMA Awards
  • Leading Man of the Year 2011
  • Leading Man of the Year 2010
• Armed Forces Foundation
  • Patriot Award^[32]

References[link]

External links[link]

• UFC homepage
• June/July Men's Fitness cover story
• Dana White at the Internet Movie Database
• Dana White on Twitter
• Dana White Signs Fox