Theoretical background for buy-and-build strategies

Allen, J.R. (1999), pp. 710 and 717; Baker, G./Montgomery, C. (1994), p. 26; Burge, S.W. (1994), p. 31; Fordyce, J.H./Stewart, S. (1994), p. 48; Trottier, R. (1995), p. 35; Wright, M./Robbie, K/Chiplin, B./Albrighton, M. (2000), pp. 140 and 161.Google Scholar

Fordyce, J.H./ Stewart, S. (1994), p. 48.Google Scholar

Allen, J.R. (1999), pp. 710 and 717; Baker, G./Montgomery, C. (1994), p. 26; Burge, S.W. (1994), p. 31; Fordyce, J.H./Stewart, S. (1994), pp. 48–49; Hoffmann, N. (2004), p. 21; Leeuw, D. de (1993), p. 46; Niederdrenk, R./Karbenk, C. (2002), p. 2; Smit, H.T. (2001), p. 79; Trottier, R. (1995), p. 36; Wright, M./Hoskisson, R. E./Busenitz, L. W. (2001), p. 117; Wright, M./Robbie, K./Chiplin, B./Albrighton, M. (2000), p. 161; Zengerling, K. (2003), p.26.Google Scholar

Jansen, S.A. (2001a), p. 44.Google Scholar

Becker, G.M. (1994), p. 308; Jansen, S.A. (2001a), p. 43; Kerler, P. (2000), p. 11; Schawel, C. (2002), p. 8; Strohmer, M.F. (2000), p. 14. For a discussion of inconsistencies concerning the term ‘acquisition’, see e.g., Gerpott, T.J. (1993a), pp. 19–21.Google Scholar

Schawel, C. (2002), p. 8.Google Scholar

Scharlemann, U. (1996), p. 7.Google Scholar

Gerpott, T.J. (1993a), p. 22.Google Scholar

Gerpott, T.J. (1993a), p. 32; Schawel, C. (2002), p. 8; Schmusch, M. (1998), p. 11; Strohmer, M.F. (2000), p. 14. For a delineation of the terms ‘merger’ and ‘acquisition’, see also e.g., Bressmer, C./Moser, A.C./Sertl, W. (1989), pp. 5–6; Schmidt, R. (2000), pp. 139–141.Google Scholar

Scharlemann, U. (1996), p. 7; Schmusch, M. (1998), p. 11.Google Scholar

Schmusch, M. (1998), p. 37. For a definition of company growth, see e.g., Hutzschenreuter, T. (2001), pp. 34–39; BRÄNDLE gives an overview of the early research on company growth, Brändle, R. (1966).Google Scholar

KÜTING provides a detailed definition of external growth, Küting, K. (1980), pp. 179–183. Early research contributions by GUTENBERG and PENROSE analyse the phenomenon M&A as a potential growth option, Gutenberg, E. (1942); Penrose, E.T. (1959).Google Scholar

Ansoff, H.I. (1957), pp. 113–114; Ansoff, H.I. (1958), pp. 393–394.Google Scholar

For further definitions of diversification from a market-oriented perspective, see also Arbeitskreis “Diversifizierung” der Schmalenbach-Gesellschaft (1973), p. 298; Biggadike, R. (1979), p. 103; Gort, M. (1962), p. 9; Sölter, A. (1972), p.60; Yip, G.S. (1982), p. 331 et seqq. The portfolio theory by MARKOWITZ focuses on the financial perspective of diversification, see Markowitz, H.M. (1959).Google Scholar

Ansoff, H.I. (1957), p. 118.Google Scholar

For more detailed information on value chain research, see Porter, M.E. (1985), pp. 36–53.Google Scholar

Different categorisations of diversification strategies exist, see e.g., Detrie, J.-P./ Ramanantsoa, B. (1986), p. 32; Hungenberg, H. (1995), p. 143; Rumelt, R.P. (1974), p. 30. SZELESS provides an overview of existing research on diversification and company performance. The results are quite diverse. Basically, moderate diversification increases company performance, whereas excessive diversification is not beneficial. Further, diversification based on related immaterial resources is most successful, Szeless, G. (2001), pp. 71–74. This is mostly in line with his own findings, Szeless, G. (2001), pp. 236–237.Google Scholar

Ansoff, H.I. (1965), p. 132.Google Scholar

E.g., Birley, S. (1976), p. 71; Gomez, P./Weber, B. (1989), p. 15; Reissner, S. (1992), pp. 30–31. KITCHING and the Federal Trade Commission (FTC), for example, use the same categories of acquisition strategies as ANSOFF, Kitching, J. (1967), p. 85; Lubatkin, M. (1983), p. 218.Google Scholar

Bea, F.X. (1988), p. 2521; Bühner, R. (1990b), p. 5; Jung, H. (1993), p. 95; Schawel, C. (2002), p. 11; Strohmer, M.F. (2000), p. 19.Google Scholar

Möller, W.-P. (1983), p. 88; Kitching, J. (1967), p. 85.Google Scholar

Bundeskartellamt (2003), p. 272.Google Scholar

Bühner, R. (1990b), p. 5.Google Scholar

Bea, F.X. (1988), p. 2521; Bühner, R. (1990b), p. 5; Bundeskartellamt (2003), p. 272; Jung, H. (1993), p. 95; Kitching, J. (1967), p. 85; Sautter, M.T. (1989), pp. 8–13; Scharlemann, U. (1996), pp. 9–10; Schawel, C. (2002), p. 12; Strohmer, M.F. (2000), pp. 19–20.Google Scholar

Jung, H. (1993), p. 96; Kitching, J. (1967), p. 85.Google Scholar

Alternatively, the conglomerate acquisition strategy is also called diagonal or unrelated, Schawel, C. (2002), p. 12.Google Scholar

Bühner, R. (1990b), p. 5; Jung, H. (1993), p. 95; Strohmer, M.F. (2000), p. 20.Google Scholar

Porter, M.E. (1976); Rumelt, R.P. (1974); Salter, M.S./Weinhold, W.A. (1979). Despite using the same notation for acquisition strategies, their understanding might sometimes be slightly different, Seth, A. (1990a), pp. 107–108.Google Scholar

Scharlemann, U. (1996), pp. 11–13. For an overview of possible countermeasures against a hostile acquisition, see e.g., Schmidt, R. (2003), pp. 26–28.Google Scholar

Allen, J.R. (1999), pp. 710 and 717; Burge, S.W. (1994), p. 32; Hoffmann, N. (2004), p. 21; Niederdrenk, R./Karbenk, C. (2002), p. 2; O’Donnell, M. (2001), p. 21; Smit, H.T. (2001), p. 79; Zengerling, K. (2003), p. 26.Google Scholar

Fordyce, J.H./ Stewart, S. (1994), p. 49.Google Scholar

Allen, J.R. (1999), pp. 710 and 717.Google Scholar

Fordyce, J.H./ Stewart, S. (1994), p. 49; Hoffmann, N. (2004), p. 21; Niederdrenk, R./Karbenk, C. (2002), p. 2; Smit, H.T. (2001), p. 79; Trottier, R. (1995), p. 39; Zengerling, K. (2003), p.26.Google Scholar

O’Donnell, M. (2001), p. 21.Google Scholar

Rappaport, A. (1986). Before FRUHAN dealt with the creation, transfer, and destruction of shareholder value, Fruhan, W.E. Jr. (1979). Later the shareholder value approach outlined by RAPPAPORT is further advanced by COPELAND/KOLLER/MURRIN who mainly focused on valuation issues, Copeland, T./Koller, T./Murrin, J. (1990).Google Scholar

Markowitz, H.M. (1952)Google Scholar

Sharpe, W.F. (1964).Google Scholar

Lintner, J. (1965).Google Scholar

Hutzschenreuter, T. (2001), p. 25.Google Scholar

Rappaport, A. (1986), p. 141.Google Scholar

Rappaport, A. (1998), p. 33.Google Scholar

Chakravarthy, B.S. (1986), p. 448. Stakeholder value represents the value of the company for all stakeholders. For a detailed overview of the stakeholder value concept, see Janisch, M. (1993), pp. 112 et seqq.Google Scholar

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Schmusch, M. (1998), p. 31.Google Scholar

Rappaport, A. (1986), p. 51.Google Scholar

For a detailed overview of the DCF approach, see e.g., Copeland, T./ Koller, T./ Murrin, J. (1990), pp. 131 et seqq.; Hachmeister, D. (2000), pp. 91 et seqq.; Rappaport, A. (1999), pp. 39 et seqq. Alternative valuation methods (e.g., multiples, liquidation value) exist but for the purpose of this research work should not be outlined in detail. For a detailed overview, see e.g., Drukarczyk, J. (2001), pp. 127 et seqq. SCHMIDT distinguishes three purposes of company valuation: consulting of sellers and buyers, tool for argumentation, and facilitator towards agreement, Schmidt, R. (1979), pp. 1446–1447.Google Scholar

Copeland, T./ Koller, T./ Murrin, J. (1990), pp. 135–136.Google Scholar

Copeland, T./ Koller, T./ Murrin, J. (1990), p. 135. For a detailed overview of cost of capital, see Copeland, T./Koller, T./Murrin, J. (1990), pp. 239 et seqq.Google Scholar

Copeland, T./ Koller, T./ Murrin, J. (1990), pp. 135–136.Google Scholar

Copeland, T./ Koller, T./ Murrin, J. (1990), p. 274. For a detailed overview of different methods to determine the continuing value, see Copeland, T./Koller, T./Murrin, J. (1990), pp. 274 et seqq..Google Scholar

Rappaport, A. (1986), p. 76.Google Scholar

Schmidt, R. (1996), p. 683.Google Scholar

However, a sensitivity analysis at least allows an investigation of the impact of the different value drivers on the shareholder value, Schmidt, R. (1996), p. 682.Google Scholar

Bamberger, B. (1994), pp. 93–94; Schmidt, R. (1993), pp. 286–288. For a detailed assessment of the advantages and drawbacks of the SVA, see e.g., Janisch, M. (1993), pp. 92–110. For a comparison of the SVA with other valuation approaches, see e.g., Schmidt, R. (1993), pp. 290–293.Google Scholar

For a detailed overview, see e.g., Jung, H. (1993), pp. 5–14.Google Scholar

An M&A is assumed to be successful if the abnormal return is positive and vice versa. For the calculation of the abnormal return, researchers apply different models (e.g., the market model). The results depend significantly on the selected point in time (e.g., announcement of the deal, closure of the deal) and the timeframe of the analysis (i.e., number of days before and after the selected point in time), Jung, H. (1993), pp. 7–8.Google Scholar

For a detailed discussion of the important drawbacks, see e.g., Albrecht, S. (1994), pp. 69–77.Google Scholar

For an empirical study, see Porter, M.E. (1987a).Google Scholar

E.g., Bull, I. (1989), p. 276.Google Scholar

Bächle, C.M./ Hager, P. (1999), p. 380; Beaver, G. (2001), p. 307; Bruining, H./Wright, M. (2002), p. 165; Bull, I. (1989), p. 277; Hite, G.L./Vetsuypens, M.R. (1989), p. 955; Houlden, B. (1990), p. 277; Kester, W.C./Luehrman, T. (1995), p. 120; Lowenstein, L. (1985), p. 756; Weir, C. (1996), p. 28.Google Scholar

Bächle, C.M./ Hager, P. (1999), p. 381; Baker, G. P./Montgomery, C.A. (1994), p. 22; Braining, H./Wright, M. (2002), p. 165; Hite, G.L./Vetsuypens, M.R. (1989), pp. 956–957.Google Scholar

Ross, S.A. (1973), p. 134.Google Scholar

Jensen, M.C./ Meckling, W.H. (1976), p. 308.Google Scholar

Seminal research by Akerlof, G.A. (1970); Leland, H.E./Pyle, D.H. (1977); Ross, S.A. (1977); Spence, M. (1973).Google Scholar

Seminal research by Jensen, M.C./ Meckling, W.H. (1976); Myers, S.C. (1977).Google Scholar

For a delineation of these two terms, see Arrow, K.J. (1985), pp. 38 et seqq.Google Scholar

Jensen, M.C./ Meckling, W.H. (1976), p. 309.Google Scholar

Eisenhardt, K.M. (1989a), p. 61.Google Scholar

Bader, H. (1996), p. 20.Google Scholar

Kraft, V. (2001), pp. 48–49.Google Scholar

Berger, M. (1993), pp. 76–77; Kraft, V. (2001), pp. 48–49.Google Scholar

Berger, M. (1993), pp. 77–78; Forst, M. (1993), pp. 41–45; Neukirchen, D. (1996), p. 19.Google Scholar

Forst, M. (1993), pp. 45–52; Neukirchen, D. (1996), pp. 19–20.Google Scholar

Jensen, M.C. (1986), p. 323.Google Scholar

Monitoring not only includes ‘measuring and observing the behavior of the agent’, but also ‘efforts on the part of the principal to ‘control the behavior of the agent through budget restrictions, compensation policies, operating rules, etc.’, Jensen, M.C./ Meckling, W.H. (1976), p. 308.Google Scholar

Costs for the agent ‘to guarantee that he will not take certain actions which would harm the principal and to ensure that the principal will be compensated if he does take such actions’, Jensen, M.C./ Meckling, W.H. (1976), p. 308.Google Scholar

‘The dollar equivalent of the reduction in welfare experienced by the principal as a result of [the] divergence’ between the agent’s decisions (given optimal monitoring and bonding activities by the principal and agent) and those decisions which would maximize the welfare of the principal, Jensen, M.C./ Meckling, W.H. (1976), p. 308.Google Scholar

Jensen, M.C./ Meckling, W.H. (1976), p. 308.Google Scholar

Forst, M. (1993), p. 40; Graml, R. (1996), p. 215.Google Scholar

The concept of signalling is first introduced by SPENCE for the job market, see Spence, M. (1973). ROSS and LELAND/PYLE transfer this concept into the context of finance. Both researchers state that the financial structure provides information (i.e., a signal) about the quality of the company. ROSS considers the debt level as a relevant signal, whereas LELAND/PYLE look at the managers’ equity stake, Ross, A. (1977) and Leland, H.E./Pyle, D.H. (1977). MYERS/MAJLUF analyse the significance of new equity issuance as signal, Myers, S.C./Majluf, N.S. (1984). Other researchers discuss the impact of the company’s dividend policy as a signal, e.g., Kalay, A. (1980); Miller, M.H./Rock, K. (1985).Google Scholar

Berger, M. (1993), p. 109; Forst, M. (1993), p. 88.Google Scholar

Due diligence is the investigation and evaluation of the company. Different types of due diligence can be distinguished. Examples are management, financial, legal, tax, market, and technical due diligence, e.g., Berens, W./ Strauch, J. (2002), p. 45; Brühl, V. (2002), pp. 313–314.Google Scholar

Picot, A./ Reichwald, R./ Wigand, R.T. (2001), p. 58.Google Scholar

Forst, M. (1993), p. 100; Fried, V.H./Hisrich, R.D. (1994), p. 28.Google Scholar

Beaver, G. (2001), p. 308; Kaplan, S.N. (1989), p. 251; Lichtenberg, F.R./Siegel, D. (1990), p. 166; Phan, P.H./Hill, C.W. (1995), p. 730.Google Scholar

Thompson, R.S./ Wright, M. (1991), pp. 17–18.Google Scholar

Amess, K. (2002), p. 315; Easterwood, J.C./Seth, A./Singer, R.F. (1989), p. 42; Frankfurter, G.M./Gunay, E. (1992), p. 93; Jensen, M.C. (1989), p. 44; Phan, P.H./Hill, C.W. (1995), p. 733; Smith, A.J. (1990a), p. 144; Zahra, S.A. (1995), p. 228. However, WEIR/LAING find only limited support for the role of management incentives proposed by the agency model, Weir, C./Laing, D. (1998), p. 268.Google Scholar

Unsystematic risk is specific to each company and can be diversified away. Diversification, however, is not possible for systematic risk because it is common to the overall market, Sharpe, W.F. (1970), p. 96.Google Scholar

Forst, M, (1993), pp. 84–96.Google Scholar

Neukirchen, D. (1996), p. 21.Google Scholar

For a more detailed overview, see Bächle, C.M./ Hager, P. (1999), pp. 382–383.Google Scholar

Amess, K. (2002), p. 315; Cotter, J.F./Peck, S.W. (2001), p. 135; Forst, M. (1993), p. 97; Jensen, M.C. (1989), p. 36; Kraft, V. (2201), p. 50; Lerner, J. (1995), p. 301; Smith, A.J. (1990a), p. 144; Wright, M./Wilson, N./Robbie, K./Ennew, C. (1996), pp. 61–62; Zahra, S.A. (1995), p. 229.Google Scholar

Bächle, C.M./ Hager, P. (1999), p. 381.Google Scholar

Forst, M. (1993), p. 98.Google Scholar

Amess, K. (2002), p. 315; Frankfurter, G.M./Gunay, E. (1992), p. 93; Jensen, M.C. (1989), p. 41; Long, W.F./Ravenscraft, D.J. (1993), p. 24; Smith, A.J. (1990a), p. 144.Google Scholar

For a detailed overview, see Forst, M. (1993), pp. 124–136.Google Scholar

Investors hold approximately equal proportions of all non-equity tranches of the capital structure which cannot be separated. Hence, strip financing helps to align the interests of the capital providers, Jensen, M.C. (1986), pp. 325–326; Jensen, M.C. (1988), pp. 31–32; Opler, T.C./Titman, S. (1993), p. 1998.Google Scholar

Bull, I. (1989), p. 277; Forst, M. (1993), p. 172; Neukirchen, D. (1996), pp. 32–33.Google Scholar

Jensen, M.C. (1986), p. 324; Jensen, M.C. (1988), p. 29.Google Scholar

Dördrechter, N./ Kautzsch, T. (2003).Google Scholar

Berg, A./ Gottschalg, O. (2003), pp. 6–34. See also Berg, A./Gottschalg, O. (2004a); Berg, A./Gottschalg, O. (2004b), and Berg, A./Gottschalg, O. (2004c).Google Scholar

Berg, A./ Gottschalg, O. (2003), pp. 7–8 and p. 11.Google Scholar

Berg, A./ Gottschalg, O. (2003), pp. 11–17; Berg, A./Gottschalg, O. (2004a), p. 3.Google Scholar

Berg, A./ Gottschalg, O. (2003), p. 12.Google Scholar

DeAngelo, L.E. (1986), pp. 400–401; DeAngelo, H./DeAngelo, L.E./Rice, E.M. (1984), pp. 367–368; Hite, G.L./Vetsuypens, M.R. (1989), p. 954 and pp. 957–959; Jensen, M.C. (1989), p. 40; Kaplan, S.N. (1989), p. 218; Lee, D.S. (1992), p. 1063; Lehn, K./Poulsen, A. (1989), p. 773; Long, W.F./Ravenscraft, D.J. (1993), p. 19; Lowenstein, L. (1985), pp. 740–742; Magowan, P.A. (1989), p. 17; Ofek, E. (1994), p. 638; Palepu, K.G. (1990), p. 251; Singh, H. (1990), p. 114; Singh, H. (1993), pp. 158–159.Google Scholar

DeAngelo, L.E. (1986), p. 418; Hite, G.L./Vetsuypens, M.R. (1989), p. 969; Kaplan, S.N. (1989), p. 251; Lee, D.S. (1992), p. 1078; Lehn, K./Poulsen, A. (1989), p. 773; Ofek, E. (1994), p. 653; Opler, T.C. (1992), p. 33.Google Scholar

DeAngelo, L.E. (1986), p. 418; Jensen, M.C. (1989), p. 40; Kohlberg Krevis Roberts & Co. (with Deloitte Haskins & Sells) (1989), pp. 68–69; Magowan, P.A. (1989), p. 17; Singh, H. (1990), p. 115.Google Scholar

Anders, G. (1992), p. 82; Berg, A./Gottschalg, O. (2003), p. 15.Google Scholar

Three different types of sales strategy for companies can be distinguished: exclusive negotiation (involvement of one particular buyer), controlled auction (negotiation with selected buyers), and open auction (public communication of planned sale), Müller-Stewens, G./ Spickers, J./ Deiss, C. (1999), pp. 42–43Google Scholar

BUTLER, for example, reports that in his sample private equity firms pay a significantly lower acquisition price than strategic investors, Butler, P.A. (2001), p. 145.Google Scholar

Berg, A./ Gottschalg, O. (2003), pp. 15–16; Kaufman, A./Englander, E.J. (1993), p. 75; Wright, M./Robbie, K. (1996), p. 700.Google Scholar

See e.g., Maksimovic, V./ Phillips, G. (2002).Google Scholar

Berg, A./ Gottschalg, O. (2003), p. 16.Google Scholar

DeAngelo, H./ DeAngelo, L.E. (1987), p. 43.Google Scholar

Kraft, C./ Kraft, G. (2004), p. 101 and pp. 116–121.Google Scholar

Frankfurter, G.M./ Gunay, E. (1992), p. 93; Kaplan, S. (1989a), pp. 630–631; Leland, H.E. (1989), p. 26; Long, W.F./Ravenscraft, D.J. (1993), p. 24; Newbould, G.D./Chatfield, R.E./Anderson, R.F. (1992), p. 56; Opler, T.C. (1992), p. 33; Palepu, K.G. (1990), p. 261; Smith, A.J. (1990b), p. 23. BULL, however, puts the importance of tax savings into perspective by saying that ‘buyouts would also occur with no tax savings at all’, Bull, I. (1989), p. 277.Google Scholar

Berg, A./ Gottschalg, O. (2003), p. 18; Cotter, J.F./Peck, S.W. (2001), p. 103.Google Scholar

Baker, G.P./ Wruck, K.H. (1989), p. 165; Kaplan, S.N. (1989), p. 250; Lichtenberg, F.R./Siegel, D. (1990), pp. 191–192; Long, W.F./Ravenscraft, D.J. (1993), p. 23; Muscarella, C.J./Vetsuypens, M.R. (1990), p. 1412; Opler, T.C. (1992), p. 33; Palepu, K.G. (1990), p. 261; Phan, P.H./Hill, C.W. (1995), pp. 730–731; Singh, H. (1990), p. 126; Smart, S.B./Waldfogel, J. (1994), p. 503; Smith, A.J. (1990a), pp. 162–163; Zahra, S.A. (1995), p. 242.Google Scholar

Bruining, H./Wright, M. (2002), p. 165; Wright, M./Thompson, S./Robbie, K. (1992), pp. 70–71.Google Scholar

An empirical study by SETH/EASTERWOOD finds that in the post-buyout phase the number of companies with a single business increased. If a buyout company is diversified, it tends to follow a related diversification strategy, Seth, A./ Easterwood, J. (1993), p. 258. Other researchers report that unrelated diversification remains unchanged, Liebeskind, J.P./Wiersema, M./Hansen, G. (1992), p. 85; Wiersema, M.F./Liebeskind, J.P. (1995), p. 456.Google Scholar

Baker, G.P./ Wruck, K.H. (1989), p. 165; Malone, S.C. (1989), p. 349; Muscarella, C.J./ Vetsuypens, M.R. (1990), p. 1412; Singh, H. (1990), p. 126Google Scholar

Muscarella, C.J./ Vetsuypens, M.R. (1990), p. 1412Google Scholar

Berg, A./ Gottschalg, O. (2003), p. 20.Google Scholar

Easterwood, J.C./ Seth, A./ Singer, R.F. (1989), p. 42; Liebeskind, J.P./Wiersema, M./Hansen, G. (1992), p. 85; Wiersema, M.F./Liebeskind, J.P. (1995), pp. 455–457.Google Scholar

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Some researchers report that headcount reduction in buyouts is not noteworthy (Kaplan, S.N. (1989), p. 250; Malone, S.C. (1989), p. 349; Muscarella, C.J./Vetsuypens, M.R. (1990), p. 1412; Palepu, K.G. (1990), p. 261; Smith, A.J. (1990a), p. 163), others do not support this finding (Lichtenberg, F.R./Siegel, D. (1990), pp. 191–192; Kester, W.C./Luehrman, T. (1995), p. 120).Google Scholar

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Kaplan, S.N./ Schoar, A. (2003), p. 2. Private equity firms are largely exempt from the disclosure requirements.Google Scholar

See also Ljungqvist, A./ Richardson, M. (2003), p. 5.Google Scholar

Venture Economics, a division of Thomson Financial, is an information provider specialising in the private equity industry. For an assessment of the data quality for studies on buyout performance, see Ljungqvist, A./ Richardson, M. (2003), p. 4.Google Scholar

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Gottschalg, O./ Phalippou, L./ Zollo, M. (2004), pp. 25 and 53.Google Scholar

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Scheller, K.R. (1999), pp. 30–31; Schmidt, R. (2003), p. 25; Seth, A. (1990a), p. 107; Seth, A. (1990b), p. 432. The empirical study by BAMBERGER on M&A motives in the Germany market reveals that especially market power and sales synergies play an important role, Bamberger, B. (1994), pp. 75–83.Google Scholar

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Gomez, P. (1989), p. 445.Google Scholar

The term’ synergy’ is also applied in other sciences, such as e.g., theology, chemistry/ pharmacology and physiology, Ropella, W. (1989), pp. 174–175.Google Scholar

Ehrensberger, S. (1993), p. 13; Kerler, P. (2000), p. 23; Ropella, W. (1989), p. 188; Scholz, J. (2000), p. 156.Google Scholar

For more details, see Porter, M.E. (1985), pp. 317–415.Google Scholar

For a detailed overview, see Ehrensberger, S. (1993), pp. 16–18.Google Scholar

For a detailed overview of definitions, see Ehrensberger, S. (1993), pp. 19–20 and Reissner, S. (1992), p. 106.Google Scholar

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For a detailed overview, see Kerler, P. (2000), p. 71.Google Scholar

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Porter, M.E. (1987b), p. 41. Building on PORTER, REISSNER develops an extended model consisting of five sources of synergies. In addition to the aforementioned synergies, he adds synergies through integration/restructuring, add-on/access, and balance. For a detailed overview, see Reissner, S. (1992), pp. 109–126.Google Scholar

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Kerler, P. (2000), p. 73; Sudarsanam, S./Holl, P./Salami, A. (1996), p. 674. See also Barney, J.B. (1988), p. 77.Google Scholar

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PANZAR/WILLIG introduced the term ‘economies of scope’ in 1975, Willig, R.D. (1979), p. 346, footnote 1. First the term is used in the context of multi-product companies (e.g., Panzar, J.C./Willig, R.D. (1981); Willig, R.D. (1979)), but later also in the context of mergers & acquisitions, e.g., Bühner, R. (1990c), pp. 307; Ehrensberger, S. (1993), pp. 30 et seqq. TEECE differentiates four different types of economies of scope, see Teece, D.J. (1982), pp. 48–54. For an early empirical study, see Baumol, W.J./Braunstein, Y.M. (1977). For research contributions concerning the empirical relevance of economies of scope, see e.g., Bailey, E.E./Friedlaender, A.F. (1982), Gilligan, T./Smirlock, M./Marshall, W. (1984), and Kellner, S./Mathewson, G.F. (1983).Google Scholar

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SCHERER et al. provide an overview of the concept of economies of multi-plant operation, Scherer, F.M. et al. (1975).Google Scholar

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The underlying effect is called economies of scheduling (e.g., Lubatkin, M. (1983), p. 219), resulting in reduced transaction costs and uncertainty, Perin, S. (1996), p. 16; Scholz, J. (2000), p. 160.Google Scholar

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Perin, S. (1996), pp. 12–13. SCHOLZ outlines cross-subsidizing and multi-market contacts/multi-point competition as two additional sources of market power, Scholz, J. (2000), pp. 188–191.Google Scholar

CHATTERJEE uses the term ‘collusive synergy’, Chatterjee, S. (1986), p. 121.Google Scholar

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Lubatkin, M. (1983), p. 219. Not surprisingly, monopoly power is never mentioned as a key motive (especially for horizontal mergers/acquisitions) but rather efficiency gains. Alternatively, it is argued that the relevant market is much broader to address the accusation of emerging monopoly power, Trautwein, F. (1990), p. 286.Google Scholar

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Empirical studies do not unequivocally support the existence of value creation through market power synergies in horizontal M&A, see Eckbo, B.E. (1983); Stillman, R. (1983).Google Scholar

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In addition, in the case of international diversification, the possibility to arbitrage different financial markets may exist, resulting in lower costs of capital, Scholz, J. (2000), p. 178.Google Scholar

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E.g., Sautter, M.T. (1989), pp. 137–140.Google Scholar

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Tax arbitrage occurs when company profits are shifted into low tax countries by means of transfer pricing, Scholz, J. (2000), pp. 179–180.Google Scholar

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The opportunity to increase the debt capacity does not depend on the existence of unused leverage on the part of the companies involved prior to consolidation. Even if the debt capacity were fully exploited, the increase of the financial leverage would be possible in the case of the M&A due to the altered risk profile, Lewellen, W.G. (1971), p. 534.Google Scholar

Lewellen, W.G. (1971), p. 525. See also Choi, D./Philippatos, G.C. (1983), p. 254; Sudarsanam, S./Holl, P./Salami, A. (1996), pp. 675–676. HIGGINS argues that LEWELLEN ‘only examines explicitly the impact of the merger on the firms’ creditors’ and ‘if the transaction costs of bankruptcy are included in the Lewellen analysis, it is no longer generally sufficient to consider only the probability of bankruptcy’, Higgins, R.C./Schall, L.D. (1975), p. 93. A related theoretical issue is the so-called ‘co-insurance effect’. It assumes that one of the companies involved in the M&A was solvent and the other one insolvent (had the companies not merged). Hence, the shareholders of the solvent company are worse off after the M&A. The effect is the opposite for the debt providers of the insolvent company. However, countermeasures exist to reduce the co-insurance effect, Shrieves, R.E./Pashley, M.M. (1984), pp. 39–40. Perhaps the most important countermeasure is the use of increased leverage, Galai, D./Masulis, R.W. (1976), p. 69; Higgins, R.C./Schall, L.D. (1975), p. 111; Kim, E.H./McConnell, J.J. (1977), p. 362. For alternative countermeasures, see Asquith, P./Kim, E.H. (1982), p. 1227. The results of an empirical study by SHRIEVES/PASHLEY confirm the increase of financial leverage in M&A, which supports both the increased debt capacity theory and the co-insurance wealth transfer theory, Shrieves, R.E./Pashley, M.M. (1984), p. 47.Google Scholar

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Unsystematic risk is specific to each company and can be diversified away. Diversification, however, is not possible for systematic risk because it is common to the overall market, Sharpe. W.F. (1970), p. 96.Google Scholar

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LEVY/SARNAT identify four reasons (indivisibilities, differential transactions costs, the cost of acquiring information, the difficulties of keeping track of numerous investments) for market imperfection, Levy, H./ Sarnat, M. (1970), pp. 799–800. LINTNER shows that gains may also be possible if the shareholders had held shares in only one of the companies involved prior to the M&A and had had no assessment of the other company, due to high information costs, Lintner, J. (1971), pp. 107–109.Google Scholar

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Seth, A. (1990a), p. 108. For example, studies which apply different categorisations to differentiate M&A transactions by their degree of relatedness lead ceteris paribus to different results. In addition, sampling criteria (e.g., the size of transactions considered) might also cause a bias in the research findings. SETH finds that the size of the target relative to the acquirer has an impact on synergies and, hence, value creation, Seth, A. (1990a), pp. 112–113.Google Scholar

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Empirical studies, which analyse value creation in M&A using the capital market-based approach for different historic timeframes, find that deals in the 1960s and 1970s were successful, whereas deals in the 1980s were rather unsuccessful. KERLER, however, argues that this finding is biased primarily due to changes in capital markets’ efficiency and basic regulatory parameters, Kerler, P. (2000), pp. 122–123.Google Scholar

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Heckner, F. (1998), p. 70.Google Scholar

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E.g., interviews, strategic analyses (sector structure, competition intensity, benchmarking etc.), Heckner, F. (1998), pp. 72–73.Google Scholar

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LInear Structural RELationship. For an outline of causality analysis, see Brachinger, H.W./ Ost, F. (1996), pp. 731 et seqq. For an overview of other statistical methods (e.g., cluster analysis, regression analysis), see Weidemann, C. (1999), pp. 17–21.Google Scholar

Quantitative, exploratory studies consider multiple variables to determine relevant success factors based on a multi-linear regression analysis. The most famous example is the PIMS-programme, Heckner, F. (1998), pp. 77–79. Other existing studies, e.g., Albach, H. (1988); Patt, P.-J. (1988); Müller, S. (1991); Raffée, H./Fritz, W. (1991); Wohlgemuth, A.C. (1989a); Seibert, S. (1987); Zielke, A.E. (1992).Google Scholar

Quantitative, confirmatory studies use existing findings and theories to derive hypotheses about success factors. Afterwards, the hypotheses are verified based on empirically generated data using sophisticated statistical methods, Heckner, F. (1998), pp. 79–80; Lechler, T. (1997), p. 61. Existing studies, e.g., Hildebrandt, L. (1988); Kube, C. (1991).Google Scholar

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Profit Impact of Marketing Strategy. Buzzell, R.D./ Gale, B.T. (1989). By means of a standardised questionnaire, the necessary data is gathered from companies in the US and in Europe before they are stored in a database. A multi-linear regression analysis is used to determine the relevant success factors. ‘Return on investment’ (ROI), ‘return on sales’ (ROS) and ‘cash flow’ are used as success indicators (dependent variables), Heckner, F. (1998), p. 78. For a critical assessment of the PIMS-programme, see Fritz, W. (1990), p. 102.Google Scholar

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Anthony, R.N./ Dearden, J./ Vancil, R.F. (1972).Google Scholar

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WIEDEMANN, for example, analyses success factors in the context of product innovation, Wiedemann, C. (1999).Google Scholar

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Peters, T.J./ Waterman, R.H. (1982), p. 10; Waterman, R.H. (1982), p. 70. For a critical assessment, see Fritz, W. (1990), p. 93.Google Scholar

Buzzell, R.D./ Gale, B.T. (1989).Google Scholar

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Nicolai, A./ Kieser, A. (2002), p. 582. The existing studies are very heterogeneous, for example, with respect to the type of potential success factors considered, the sample size, the sophistication of theoretical foundation, and the number of relevant success factors identified, Fritz, W. (1990), p. 103.Google Scholar

This approach is frequently justified by the fact that relevant theories do not exist, Lehner, F. (1995), p. 387.Google Scholar

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Potential success factors can be identified based on existing theory, plausible conclusions, situation-specific knowledge, intuition, and expert experience, as well as existing empirical findings, Lange, B. (1982), p. 31.Google Scholar

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Jacobs, S. (1992), p. 31. Several authors criticise the absence of a comprehensive theoretical concept which consolidates the heterogeneous findings of existing success factor research and is empirically tested, see Grimm, U. (1983), p. 6; Raffée, H./Fritz, W. (1991), p. 1212; Wohlgemuth, A.C. (1989b), p. 93. For a detailed overview of the terms ‘theory’ and ‘quasi-theory’, see e.g., Raffée, H. (1974), pp. 30 and 39.Google Scholar

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Daschmann, H.-A. (1993), p. 5. The large majority of authors share the understanding that success potential is the combined effect of all success factors. Only a small minority uses the terms’ success factors’ and’ success potential’ conterminously which is assumed to be inappropriate, see Daschmann, H.-A. (1993), p. 5, footnote 23. For an overview of the relation between success potential and success factors, see Ohms, W.J. (2000), p. 12.Google Scholar

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Göttgens, O. (1996), pp. 35–36. For a graphical overview of the impact of the three components which influence the intensity of success factors and the impact in the case of variable elasticities on the success potential, see Wilde, K.D. (1989), pp. 57–58.Google Scholar

For a detailed overview of possible problems due to the complex causality structure of multiple variables, see Daschmann, H.-A. (1993), p. 9.Google Scholar

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JAKOBY uses the change of performance measures (return on investment, return on sales, and the ratio between cash flow and sales) as success indicators. In addition, he asks for a personal assessment of the MBO success by the managers, since several respondents were not willing to provide the performance data requested. Due to the complexity of the data required, JAKOBY already rejected a DCF-based company valuation as a possible success indicator after the pretests, Jakoby, S. (2000), pp. 125–136.Google Scholar

Bamberger, B. (1994). In addition, JAKOBY incorporates M&A-related research findings, especially of German studies, e.g., Böhmer, E./Löffler, Y. (1999); Bühner, R. (1990b); Gerpott, T.J. (1993b); Jung, H. (1993); Kusewitt, J.B. (1985); Möller, W.-P. (1983); Porter, M.E. (1987b); Sautter, M.T. (1989).Google Scholar

Forst, M. (1992); Gräper, M. (1993); Vest, P. (1995). In addition, JAKOBY considers buyout-related research findings of German studies (e.g., Berger, M. (1993); Hoffmann, P./Ramke, R. (1992); Huydts, H.J. (1992); Luippold, T.L. (1991); Schwenkedel, S. (1991)) and US/UK studies (e.g., Ambrose, B.W./Winters, D.B. (1992); DeAngelo, H./DeAngelo, L.E./Rice, E.M. (1984); Kitching, J. (1989); Wright, M./Coyne, J. (1985); Wright, M./Normand, J./Robbie, K (1990)). For an overview of existing studies about the success of buyouts, see Jakoby, S. (2000), pp. 51 et seqq.Google Scholar

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JAKOBY also contacted private equity firms by telephone. However, only a few were willing to support the study, Jakoby, S. (2000), p. 97.Google Scholar

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In their study about German M&As which is based on capital market data, BÖHMER/LÖFFLER find very significant positive abnormal returns for the buyer in years with strong economic growth, Böhmer, E./ Löffler, Y. (1999), pp. 322–323.Google Scholar

Bamberger, B. (1994), p. 191.Google Scholar

Jakoby, S. (2000), pp. 149–150.Google Scholar

Bamberger, B. (1994), p. 195.Google Scholar

I.e., the lower the stock prices in the year of the acquisition, the higher the success rate of M&A, Kusewitt, J.B.(1985), p. 160.Google Scholar

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Jakoby, S. (2000), pp. 152–153.Google Scholar

Jakoby, S. (2000), p. 155.Google Scholar

CMBOR (2003), p. 24 (Europe overall) and pp. 96–98 (Germany).Google Scholar

Jakoby, S. (2000), pp. 156–157. AMBROSE/WINTERS, for example, test the industry-effect hypothesis in the context of buyouts. The industry-effect hypothesis states that industry-specific factors are the primary motivation to buy out a company. They conclude that firm-specific factors primarily drive buyouts and that industry-specific factors are only of secondary importance, since the authors do not find a strong correlation between positive cash flow, low growth rate, and multiple reported buyouts in particular industries. In addition, the tests on the existence of excess returns in particular industries is inconclusive, Ambrose, B.W./Winters, D.B. (1992), pp. 89 and 100. However, in an early study GIMPEL-ISKE reports that the success rate of German M&A are different, depending on the sector, Gimpel-Iske, E. (1973), p. 131.Google Scholar

Jakoby, S. (2000), p. 158. Since the companies in a particular sector are very heterogeneous, JAKOBY uses management expectations instead of sector-specific growth rates.Google Scholar

For a detailed overview, see Forst, M. (1992), pp. 31 and 65; Gräper, M. (1993), pp. 95–97; Vest, P. (1995), p. 52. In addition, different types of deal sources are outlined in 2.1.2.3.Google Scholar

MÖLLER and BAMBERGER analyse acquisition success for different motives for a sale. The authors conclude that acquisitions, due to the seller’s financial problems are less successful than acquisitions due to non-financial reasons (e.g., strategic repositioning), Bamberger, B. (1994), pp. 241–242; Möller, W.-P. (1983), pp. 182–183.Google Scholar

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Vest, P. (1995), p. 322.Google Scholar

Forst, M. (1992), p. 80; Gräper, M. (1993), p. 104. VEST differentiates four reasons for an MBO: financial, strategic, reputation, and time pressure, Vest, P. (1995), p. 113.Google Scholar

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Gräper, M. (1993), pp. 90–91.Google Scholar

Jakoby, S. (2000), pp. 172–173.Google Scholar

Jakoby, S. (2000), pp. 174–175.Google Scholar

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For a detailed overview, see Forst, M. (1992), p. 87; Gräper, M. (1993), p. 100; Vest, P. (1995), p. 190.Google Scholar

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Jakoby, S. (2000), pp. 183–186.Google Scholar

Jakoby, S. (2000), pp. 187–188.Google Scholar

Jakoby, S. (2000), pp. 189–191. A negative attitude, however, can also be harmful for the M&A because it may result in a loss of motivation and also know-how if very skilful managers decide to leave the company, Bamberger, B. (1994), p. 276; Gerpott, T.J. (1993b), pp. 1287–1288.Google Scholar

Different research contributions exist which report that a relatively small number (< 5) of managers involved is optimal for a successful MBO, Forst, M. (1992), p. 69; Gräper, M. (1993), p. 121; Hoffmann, P./Ramke, R. (1992), p. 50; Luippold, T.L. (1992), p. 340; Vest, P. (1995), p.196; Wright, M./Coyne, J. (1985), p. 83.Google Scholar

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Jakoby, S. (2000), p. 209.Google Scholar

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Existing empirical studies about German buyouts provide inconsistent results, see Gräper, M. (1993), p. 106; Vest, P. (1995), p. 86.Google Scholar

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For a detailed overview of strategic, cultural, and financial fit, see Jung, H. (1993), pp. 162 et seqq. JAKOBY provides a summary of key components of a strategic and financial analysis, Jakoby, S. (2000), pp. 224 et seqq. Several research contributions outline lists of assessment criteria of buyouts, Ballwieser, W./Schmid, H. (1990), pp. 358–360; Golden, W.J./Little, A.D. (1985), p. 11; Gräper, M. (1993), pp. 39–57; Hitschler, W. (1990), pp. 1879–1880; Hoffmann, P./Ramke, R. (1992), pp. 48–68; Huydts, H.J. (1992), pp. 61–82; Kramer, J. (1989), p. 1002; Küting, K (1997), pp. 134–135; Lezius, M. (1989), pp. 926–930; Luippold, T.L. (1992), pp. 54–64; Milde, H. (1990a), pp. 7–8; Quick, R. (1991), pp. 313–315; Schmid, H. (1994), pp. 90–92. For a critical assessment of standardised key criteria, see Schmid, H. (1994), pp. 92–94; Vest, P. (1995), p. 119.Google Scholar

Jakoby, S. (2000), pp. 221–222. For the author of this research project, it is not clear if the assumed (ex post) suitability of the target company for a buyout is a cause of success or an effect of a successful buyout.Google Scholar

For a detailed overview, see Drukarczyk, J. (2001), pp. 127 et seqq.Google Scholar

The net asset value (NAV) is equal to the book value of the assets plus hidden reserves, e.g., Bressmer, C./ Moser, A.C./ Sertl, W. (1989), p. 144.Google Scholar

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For an outline of the role and involvement of external advisors, see e.g., Müller-Stewens, G./ Spickers, J./ Deiss, C. (1999), pp. 55–60.Google Scholar

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Jakoby, S. (2000), pp. 266–267.Google Scholar

Jakoby, S. (2000), pp. 268–269.Google Scholar

Jakoby, S. (2000), pp. 272–276. JAKOBY distinguishes two types of equity participation which do not necessarily have to be equal: (i) share of equity used to finance the acquisition price and (ii) equity share in the company.Google Scholar

Jakoby, S. (2000), pp. 276–278.Google Scholar

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Possible reasons are, for example, continuous cooperation in the case of spin-off buyouts, support of a successful completion of the transaction, and participation in a positive business development in the future, Berger, M. (1993), p. 192; Schwenkedel, S. (1991), p. 100.Google Scholar

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KERLER describes the different roles of external parties involved in an M&A transaction, Kerler, P. (2000), pp. 242–258.Google Scholar

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Amihud, Y. (1989), p. 14; Lowenstein, L. (1986), p. 149.Google Scholar

Jakoby, S. (2000), pp. 289–290.Google Scholar

Jakoby, S. (2000), pp. 291–293.Google Scholar

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For example, acquisition price, structure of shares, financing structure, taxation issues, payment method, and extent of liability for the seller, Berens, W./ Mertes, M./ Strauch, J. (1999), pp. 58-59; Blumentritt, J. (1993), p. 242.Google Scholar

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Jakoby, S. (2000), pp. 300–301.Google Scholar

This ratio indicates the number of years necessary to redeem the acquisition price by the cash flow which is assumed to be constant going forward. FORST reports an average relative acquisition price of approximately 4 (5) for spin-off (succession) buyouts, Forst, M. (1992), pp. 49 and 82. See also Vest, P. (1995), p. 212.Google Scholar

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Jakoby, S. (2000), pp. 305–306.Google Scholar

Jakoby, S. (2000), p. 314.Google Scholar

Jakoby, S. (2000), p. 315. For existing research, see e.g., Kitching, J. (1989), p. 79. For the author of this research project, the actual debt repayment is rather an effect and not a cause of a successful buyout.Google Scholar

Jakoby, S. (2000), p. 316. For the author of this research project, the level of the equity share is rather an effect and not a cause of a successful buyout.Google Scholar

Jakoby, S. (2000), pp. 318–319. For the author of this research work, it appears intuitively more sensible to reverse the cause-effect relationship presented by JAKOBY (i.e., the number of employees is an effect and not a potential success factor).Google Scholar

Jakoby, S. (2000), pp. 320–321. BAMBERGER analyses the same cause-effect relationship for M&A in Germany. He concludes that it is unclear if the labor turnover rate is a cause or a consequence of a successful M&A transaction, Bamberger, B. (1994), p. 275.Google Scholar

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For a general overview of different leadership styles, see e.g., Scholz, C. (2000), p. 923, in the context of buyouts, see Wright, M./Coyne, J. (1985), pp. 100–106.Google Scholar

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Jakoby, S. (2000), p. 329.Google Scholar

Jakoby, S. (2000), pp. 330–332.Google Scholar

Jakoby, S. (2000), pp. 333–335. For the author of this research project, an exit is not necessarily a clear indicator for a successful buyout but can also be driven by different reasons (e.g., risk considerations, the maturity of a private equity fund). If at all, the exit is more an effect of success than a cause.Google Scholar

For existing empirical studies, see Baker, G.P./ Wruck, K.H. (1989), p. 182; Gräper, M. (1993), pp. 124–125; Vest, P. (1995), pp. 316–317; Wright, M./Coyne, J. (1985), pp. 97–100.Google Scholar

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Bamberger, B. (1994).Google Scholar

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Depending on the scale of the data, BAMBERGER used different methods, Bamberger, B. (1994), pp. 53–58.Google Scholar

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For a summary of various research contributions concerning acquisition motives, see Bamberger, B. (1994), pp. 61 et seqq.Google Scholar

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For a detailed overview, see Roll, R. (1986).Google Scholar

An excessive acquisition price is frequently named as a key reason for failure in M&A transactions, Jansen, S.A. (2000a), p. 334. See also Bühner, R. (1990b), p. 208.Google Scholar

Bamberger, B. (1994), pp. 209–210. To measure the corporate strength of the company, BAMBERGER benchmarks four business indicators (i.e., sales growth, profitability, management skills, technology position) against other companies in the same sector. The business indicators reflect an average of the previous five years. SCHMIDT describes potential approaches to assess the corporate strength of a company based on financial ratios. For more details, see Schmidt, R. (1980).Google Scholar

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Bühner, R. (1990b), pp. 155–158; Möller, W.-P. (1983), p. 177. AMIHUD/DODD/WEINSTEIN, however, do not find a significant relationship between the degree of influence of managers/owners and the success rate of M&A, Amihud, Y./Dodd, P./Weinstein, M. (1986), pp. 405 et seqq.Google Scholar

Bamberger, B. (1994), pp. 219–220. LEWELLEN/LODERER/ROSENFELD outline a positive correlation between M&A success and the equity participation of the senior managers in the acquiring company, Lewellen, W.G./Loderer, C./Rosenfeld, A. (1985), p. 230. However, the empirical studies by LANG/STULZ/WALKLING and PETRY/SETTLE do not confirm a significant correlation, Lang, L.H./Stulz, R.M./Walkling, R.A. (1991), p. 334; Petry, G./Settle, J. (1991), p. 113.Google Scholar

Bamberger, B. (1994), p. 222. The empirical study by COSH et al., however, does not support a significant positive correlation between the involvement of institutional investors and the success rate of M&A, Cosh, A.D. et al. (1989), pp. 97 et seqq.Google Scholar

JANSEN outlines a 7 C-model for successful integration consisting of coordination, culture, customers and suppliers, communication, core employees, core competencies, and control, Jansen, S.A. (2001b), pp. 10–21. GRUBE/TÖPFER provide principles for successful post-merger management, Grube, R./Töpfer, A. (2002), pp. 103–130.Google Scholar

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Bamberger, B. (1994), pp. 223–224. KUSEWITT finds a negative correlation between the number and the success rate of M&A due to an overload of integration capacity, Kusewitt, J.B. (1985), p. 159.Google Scholar

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Bamberger, B. (1994), pp. 232–233. Existing empirical studies do not report a significant correlation between the leverage of the capital structure and the success rate of M&A, Bühner, R. (1990b), p. 171; Firth, M. (1980), p. 253; Lang, L.H./Stulz, R.M./Walkling, R.A. (1991), p. 334.Google Scholar

Bamberger, B. (1994), p. 240; Möller, W.-P. (1983), p. 181.Google Scholar

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Bamberger, B. (1994), pp. 242–243. To measure corporate strength, BAMBERGER benchmarks the same four business indicators (i.e., sales growth, profitability, management skills, technology position) against other companies in the same sector. Existing empirical studies state a positive correlation between the corporate strength of the acquired company and the success rate of M&A, Hunt, J.W. (1990), p. 72.Google Scholar

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Bamberger, B. (1994), pp. 267–269. MÖLLER finds no significant correlation between the cultural compatibility and the success rate of M&A, Möller, W.-P. (1983), p. 109 et seqq. CHATTERJEE et al. confirm that in related mergers perceived cultural differences and shareholder gains of the acquiring company are inversely related, Chatterjee, S. et al. (1992).Google Scholar

Existing empirical studies conclude that the attitude of the managers in the target company towards an M&A and the success rate of the transaction are positively correlated, Fowler, K.L./ Schmidt, D.R. (1989); Jarrell, G.A./Poulsen, A.B. (1989), p. 18; Möller, W.-P. (1983), pp. 242–243.Google Scholar

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Bamberger, B. (1994), pp. 279–281. BAMBERGER reports that approximately 80% of the respondents involved in his empirical study apply the DCF approach and approximately 30% the NAV approach. Other valuation methods are only rarely used, Bamberger, B. (1994), p. 281.Google Scholar

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Bradley, M./ Dasai, A./ Kim, E.H. (1988), p. 29; Servaes, H. (1991), p. 414. However, other empirical studies find neither a positive nor a negative correlation between the two variables, e.g., Lang, L.H./Stulz, R.M./Walkling, R.A. (1991), p. 334.Google Scholar

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Fowler, K.L./ Schmidt, D.R. (1989), p. 348.Google Scholar

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E.g., Franks, J./ Harris, R./ Titman, S. (1991), p. 84; Servaes, H. (1991), p. 413; Travlos, N.G. (1987), p. 957.Google Scholar

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MÖLLER reports a significant positive correlation between the two variables, Möller, W.-P. (1983), p. 256. DATTA/GRANT, however, find a negative correlation for unrelated M&A strategies, Datta, D.K./Grant, J.H. (1990), pp. 38–39.Google Scholar

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