By Stefano Garzella, Raffaele Fiorentino
This publication addresses synergy administration, which poses a big problem for companies, advisors and practitioners interested by mergers and acquisitions (M&A). Synergy performs a key function in M&A contexts, either within the decision-making strategy and, to that end, within the integration part. besides the fact that, even though synergy price is usually considered as one of many key good fortune elements in M&A, examine exhibits that agencies quite often fail to accomplish the anticipated synergy.
The extant literature is characterised by way of an absence of complete versions of synergy administration: the review of synergy price is still a “black field” for students and practitioners alike. The authors offer a entire framework for synergy administration via integrating findings from past examine and diverse disciplines. The framework highlights the most dimensions of synergy administration in mergers and acquisitions, universal pitfalls, and new versions and instruments for keeping off them. As such, the publication enriches the M&A literature, bargains new insights for students, and offers necessary directions for practitioners fascinated with synergy management.
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Additional info for Synergy Value and Strategic Management: Inside the Black Box of Mergers and Acquisitions
Example text
IIB/EFI, Stockholm, Sweden Lippman S, Rumelt R (1982) uncertain imitability: an analysis of interfirm differences in efficiency under competition. Bell J Econ 13(2):418–438 Lubatkin M (1987) Merger strategies and stockholder value. Strateg Manag J 8(1):39–53 Luhmann N (1995) Social systems. Stanford University Press, Stanford, CA Lys T, Vincent L (1995) An analysis of the value destruction in AT&T’s acquisition of NCR. J Financ Econ 39(2):353–378 Makri M, Hitt M, Lane PJ (2010) Complementary technologies, knowledge relatedness, and invention outcomes in high technology mergers and acquisitions.
Then, the estimation of the likelihood is very relevant. The likelihood of achieving synergy in M&As is related to the ease of realisation of different synergy types: the ease of realisation is the reciprocal of the likelihood of achievement. Operating synergies have generally the lowest likelihood of achievement, instead tax synergies have the highest. Cost synergies are more likely to be achieved than revenue synergies. This is related mainly to the optimisation of a trade-off between the accuracy and quantity of data and the time needed for M&A integration.
2013; Hitt et al. 2009). Therefore, this literature stream suggests the relevance of synergy pitfalls. The existence of several causes implies the existence of multiple types of risk. However, studies reattach the risks of an unsuccessful synergy achievement to a single “trap”, whereas research that examines the several types of pitfalls that may hinder the References 27 success of M&A deals, and the mistakes related to synergy assessment and realization remain surprisingly limited (Fiorentino and Garzella 2015; Goold and Campbell 1998; Hitt et al.