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Subject: search.filters.subject.Mergers and acquisitions

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Now showing 1 - 6 of 6
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    Factors influencing post merger integration success in South Africa
    (2012-11-14) Deliwe, Chwayita
    Mergers and acquisitions (M&A) have become very popular in recent decades as a means to achieve growth and to maximise profits in companies. However, research shows that over half the M&As do not meet the intended purpose, and this is due to, amongst other reasons, post-merger integration failure. In fact previous studies have shown that the post-merger integration phase encompasses the highest risk behind the whole merger. This research aims to identify the key determinants of achieving successful post-merger integrations in South African companies. Previous studies on M&As have generally examined the success of the M&A as a whole, whereas this study focuses specifically on post-merger integration success. The data was collected through surveys. Companies that have gone through a merger or an acquisition were used in the data collection. An online survey was sent to respondents asking them to rank factors identified in the literature review in terms of importance. In two of the questions the respondents were asked to comment in a descriptive format, resulting in two new factors being identified. The research showed that strategy, due diligence, communication and socio-cultural issues like human resources are the most important factors for achieving post-merger integration success. Employees and customers were considered to be core resources of the business and therefore it was extremely important to invest in, and ensure, their satisfaction following the M&A as, without them, no business would exist. Culture was found to be the one of the most difficult factors to integrate and professional assistance from experts was often required to assist in achieving a successful culture integration.
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    Creating value from mergers in the South African pharmaceutical industry
    (2012-10-05) Naidoo, Angie Nicole
    Mergers and acquisitions (M and A's) has become a strategic option for companies to meet the strategic needs of the rapidly changing competitive landscape. Pharmaceutical companies are facing several major inter-related challenges, the most strategic being the decline in Research and Development (R and D) productivity resulting in empty product pipelines which cannot replace the products nearing patent expiry, competition from generics, healthcare costs and product liability. The aim of this study was to identify and describe the drivers of merger success in the pharmaceutical industry in South Africa and the aspects of an effective post-merger value creation strategy that will grow the business and maintain business continuity. Data was collected through conducting 20 semi-structured interviews to search for a deeper understanding of merger and acquisitions in the pharmaceutical industry in South Africa. The main findings in this research have shown that the aspects of an effective postmerger value creation strategy start with a well-articulated plan for integration. Each step of each plan has to be communicated to all stakeholders in a manner that is transparent, open and honest so that there is buy-in, acceptance and finally mobilisation of the company to create the desired value. Pivotal to local companywide post-merger value creation are leaders that are trusted, who will enable the organisation to align around the vision and mission and goals of the merger. Decisions require foresight. Culture underscores the success of any strategy in the organisation. The end goal of achieving post-merger value creation depends on the organisation’s resources, the people, processes and systems; and matching these with the external opportunities. Retaining the best from both legacy organisations and fusing them together will result in a high performance organisation which will create post-merger value. Not much has changed in the industry except for the risks and the size of the opportunities. Strategic alliances with companies that have expertise in health economics and health technology assessments and companies that have strong relationships with authorities, who will register products faster, should be an option for serious consideration for future growth.
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    Critical Success Factors in Mergers and Acquisitions in South Africa
    (2012-10-04) Nyambe, Ophelia
    This research was conducted to identify critical success factors (CSFs) in mergers and acquisitions (M&As) in South Africa. It is estimated that between 60 and 80 percent of M&As fail to create value for shareholders (Marks and Mirvis, 2001; Selden and Colvin, 2003). Developed countries have done several studies on M&As but this literature has not been theoretically integrated (Haleblian, Devers, McNamara, Carpenter and Davison, 2009). The studies are fragmented across diverse areas of academic fields such as strategic management, international business, human resource management, and finance (Shimizu, Hitt, Vaidyanath and Pisano, 2004). The complexity of engaging in M&As is exacerbated by the fact that the acquisition process consists of many other complex interdependent sub-activities, such as due diligence, negotiation, financing and integration (Hitt, Harrison and Ireland, 2001). This research has consolidated the literature and highlighted the CSFs for M&As in the South African banking industry based on an in-depth analysis of the Barclays Bank Plc acquisition of Absa (formerly Amalgamated Banks of South Africa) which was completed in 2005. Semi-structured interviews were used to collect data from twenty former team members of the Absa and Barclays’ integration team. The data was analysed using content analysis. Eighteen CSFs were tested on Absa with seventeen being validated, demonstrating that the factors affecting M&As in developed countries are also applicable to South Africa. An additional factor not mentioned in literature, namely incentivising key people, was identified in the Absa context. The broad categories of the factors validated were strategic alignment (relatedness, complementarities, new geographies, new products, new customers), acquisition experience of the acquirer, due diligence, size of the acquirer, low premium, communication, selection of new leadership, integration structure, appropriate cultural integration, involvement of top leadership, integration speed and certain external factors. Payment method was not a CSF in the Absa and Barclays M&A.
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    Perceptions of successful mergers and acquisitions in the South African construction industry
    (2012-10-02) Boshoff, Christian Jacobus
    Most research studies on the success of mergers and acquisitions (M&A) have focused on the financial measures of success. The purpose of this research was to identify the key success factors of a merger and acquisition strategy given by the executives of construction companies and financial advisors who have dealt with mergers and acquisitions in South Africa. These key factors provide the construction executives with a set of recommendations which can be used as guidelines during merger and acquisition deals. Several sources of data collection were used as evidence for the research. A review of the available literature revealed ten key success factors, and these factors were used as propositions for the remainder of the research. A questionnaire containing open-ended questions, which were administered during face-to-face interviews with the various respondents were used. A content analysis was carried out on the data collected. The most significant factors identified in the study were sound implementation plans, immediate addressing of the softer key issues such as cultural differences, managing of management as well as open communication with all the relevant parties involved. These factors are essential to realising the long-term success rate of a merger or acquisition. Strong leadership emerged as the crucial factor in ensuring that these key success elements were driven to realisation.
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    Factors influencing synergy realisation following a merger and acquisition in South Africa
    (2011-06-22) Stewart, Michael
    Most research studies on the success of merger and acquisition (M & A) transactions have focused on the financial measures of success. This study aims to determine the key success factors necessary to ensure realisation of revenue-enhancing synergies. While synergy realisation is covered generically in some studies, this study looks specifically at revenue-enhancing synergies. Using the case study method, a group that has made several acquisitions in the South African electrical projects industry was investigated. Several sources of evidence were used in the data collection. It was found that sound implementation plans, immediate addressing of HR issues as well as open communication with all concerned was essential to realising revenue-enhancing synergies. Strong leadership emerged as the crucial factor in ensuring that these success factors were driven to realisation
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    Effects of acquisitions on value and performance of JSE listed companies
    (2011-05-19) M'Kombe, Kudzai Tapiwa
    Many firms will undertake acquisitions when this is the most profitable means of enhancing capacity; obtaining new knowlwdge or skills; entering new product lines or geographic areas; or reallocating assets into the control of the most effective managers/owners (Pautler 2001). In addition to this, acquiring firms also seek to deal with overcapacity through consolidation in mature industries and exploit eroding industry boundaries by inventing a new industry (Bowler 2001). The ultimate goal is to improve shareholder value and operating financial performance for JSE listed acquiring companies. Cumulative Average Abnormal Returns (CAARS) and Industry Adjusted Cash Flow Return on Tangible Assets (IACRTA) are used as measures of shareholder value and financial performance respectively. Furthermore, statistical t-tests are used to determine the significance of these calculated measures.... This research also proves that the median IACRTA of acquiring companies, a year after an acquisition, does not significantly exceed median IACRTA before such an acquisition. However, the change in the median IACRTA a year after an acquisition for cash-funded transactions is significantly greater than the corresponding change in share-funded acquisitions.