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Value creation or destruction. Similarities and differences between the cross-border transactions of KUKA AG and Adam Opel AG

by Alexander Scheffner
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Current price ₹5,679.00
Original price ₹6,615.00
Original price ₹6,615.00
Original price ₹6,615.00
(-14%)
₹5,679.00
Current price ₹5,679.00

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Book cover type: Paperback
  • ISBN13: 9783346458865
  • Binding: Paperback
  • Subject: N/A
  • Publisher: Grin Verlag
  • Publisher Imprint: Grin Verlag
  • Publication Date:
  • Pages: 128
  • Original Price: USD 67.5
  • Language: English
  • Edition: N/A
  • Item Weight: 177 grams
  • BISAC Subject(s): General

Master's Thesis from the year 2017 in the subject Business economics - Miscellaneous, grade: 1,0, International School of Management Dortmund, course: Mergers & Acquisitions, language: English, abstract: The global Mergers & Acquisitions (M&A) market has reached new all-time highs since the meltdown of the financial crisis in 2008. In 2015, the global M&A transaction volume reached its peak amounting to USD 4.7 trillion. While this way of strategic inorganic growth is often aimed at creating value to its shareholders and stakeholders respectively, the major concern of value creation using M&A remains. Recent studies testify a negative performance from the buyers' perspective, as such as about 60% - 70% of all M&A transactions fail to generate value. Among others, the reasons include flawed valuation and thus overestimations of synergies and to unexpected high integration costs lead to value destruction. While these reasons hold true for domestic acquisitions and developed markets, there are further reasons for cross-border transactions, particularly for China, as Chinese buyer play an increasing role in worldwide M&A activities. Value destruction in such cross-border transactions is mostly associated with cultural differences, poor communications between the involved parties, lack of experience or local market know how. The findings suggest that the probability of value creation is higher if a buyer has broad experience in M&A activities, undertakes many small acquisitions, focus on cost reduction rather than growth motives and understands the market of the target company. The acquisitions of KUKA AG and Opel AG show many positive attributes, which lead to a higher probability of value creation. Beyond that, both companies are familiar with their targets and gained experience in acquisitions, which further reduce the factors that might lead of value destruction.

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