Abstract
Cross-border acquisitions play an important role in the corporate strategic development and international expansion. The paper summarizes the results of the dissertation, which intends to establish vital link between research and practice, deeply exploring the risk assessment methods and the scope of due diligence audit in the pre-acquisition phase. The central hypothesis of the comprehensive model stated that thorough due diligence in the pre-acquisition phase is necessary to make successful cross-border acquisition. The empirical evidence has been drawn on data sample of acquisitions made by automotive firms in cross-border acquisitions in the Central and Eastern Europe. The main results support the proposition that the thorough due diligence audit is necessary pre-requisite for successful acquisition. The findings further support the clear trend: In the past few years, several big automotive leaders strategically gain more control over their supply chains by acquiring technology specialists. From a practical standpoint, the research results provide acquisition management with a simple method of performing the pre-acquisition evaluation of potential acquisition candidates.
Highlights
The topic of mergers & acquisitions (M&A) has been increasingly investigated in the literature in the last two decades in response to the rise in M&A activities as well as the increasing complexity of such transactions themselves
The empirical research was performed with questionnaire survey collecting data from a sample of German automotive industry involved in cross-border acquisitions between 2007 and 2013 in the Central and Eastern European region
The sample consists of 52 evaluated transactions in the cross-border acquisitions
Summary
The topic of mergers & acquisitions (M&A) has been increasingly investigated in the literature in the last two decades in response to the rise in M&A activities as well as the increasing complexity of such transactions themselves. Acquiring a company abroad can be motivated by the wish of entering foreign market and establish strong position very quickly. It enables the drawing on complementary knowledge and differing market prospective of the acquired company and enables a realization of synergetic potentials (Epstein 2005). Acquiring a company is risky when the information of the targets business is beyond the reach of acquirer and he relies on assumptions delivered by seller. The basic argument is that the firm's information environments play significant role in acquisition decision making. This seems logically, the acquirer identifies and evaluates acquisition targets on the basis of Source: Author
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