Form Of Mergers Research Articles

Impacts on efficiency of merging the Swedish district courts

Judicial courts form a stringent example of public services using partially sticky inputs and outputs with heterogeneous quality. Notwithstanding, governments internationally are striving to improve the efficiency of and diminish the budget spent on court systems. Frontier methods such as data envelopment analysis are sometimes used in investigations of structural changes in the form of mergers. This essay reviews the methods used to evaluate the ex post efficiency of horizontal mergers. Identification of impacts is difficult. Therefore, three analytical frameworks are applied: (1) a technical efficiency comparison over time, (2) a metafrontier approach among mergers and non-mergers, and (3) a conditional difference-in-differences approach where non-merged twins of the actual mergers are identified by matching. In addition, both time heterogeneity and sources of efficiency change are examined ex post. The method is applied to evaluate the impact on efficiency of merging the Swedish district courts from 95 to 48 between 2000 and 2009. Whereas the stated ambition for the mergers was to improve efficiency, no structured ex post analysis has been done. Swedish courts are shown to improve efficiency from merging. In addition to the particular application, this work may inform a more general discussion on public service efficiency measurement under structural changes, and their limits and potential.

The Perfect Storm: The Joint Effect of Unionization and Negative Economy-Wide Shocks on Industry M&A Activity

We investigate the effect of labor unionization on industry-level takeover activity after negative economy-wide shocks. Focusing on the 2008 financial crisis, we find that merger intensities drop significantly during the post-crisis period, though the degree of unionization in an industry attenuates this negative effect. Our analyses of the 2001 and 1990 economic recessions lead to similar results. While unionization is known to deter M&A activity on average, our results indicate that in dire times, when firm survival is at risk, unions appear to be more open to restructuring activities in the form of mergers.

Comments: Better Days for E&P

Editor's column After years of reined-in spending, major operators are beginning to cautiously loosen their E&P budgets. The crash in oil prices that began in 2014 caused operators to tighten capital spending across the board, but particularly on large upstream projects. Those cuts led to many prospective developments being delayed, downsized, or canceled. The largest publicly listed companies slashed spending by 40% after the downturn began. The reduction was so drastic that it caused the International Energy Agency (IEA) and some consultancies to warn that the world could face a supply crunch just a few years out because of the impact. Supply growth would stall if E&P spending by operators did not increase, the IEA warned in a report last year, and spare production capacity would drop to its lowest level since 2008 within 2 years. But now that oil prices have apparently stabilized, upstream spending is on the rise. In its latest US Oil and Gas Reserves Study, published this year, consultancy EY notes that the 50 largest US operators are increasing capital expenditures this year for the first time since 2014, and not all of it on shale. Spending is 32% higher than in 2016 and 5% higher than in 2015. Proved oil reserves for these companies increased 21% last year. In 2017, 32 major new developments were given the go-ahead, according to consultancy Wood Mackenzie, and 18 had received approval by mid-year this year. National oil companies (NOCs) as well are seeing some budget relief with rising oil prices. But, as international oil companies have to hurdle the barriers of Wall Street, NOCs often face pressure from their governments for increased revenue when times improve. As did private companies during the downturn, NOCs slashed spending, sharpened efficiency, and cut costs during the downturn, leaving them in good shape to take advantage of current conditions. Both Saudi Aramco and Kuwait Petroleum Corp. (KPC) have announced sizable upstream budget increases for this year. Many Middle East NOCs are investing heavily in the downstream as well. Saudi Aramco, KPC, Adnoc, and Qatar Petroleum are investing in refinery and petrochemical projects at home and abroad, particularly in Asia, to ensure long-term demand for their hydrocarbons. A boost to upstream confidence has been recent major discoveries. More than 2.5 billion bbl of recoverable reserves have been found in the deepwater Atlantic margin, says Wood Mackenzie. Among the largest are ExxonMobil’s Guyana development, discoveries in the US Gulf of Mexico by Shell and Chevron, and Eni’s find on the Mexican side of the Gulf of Mexico. The Liza complex alone in Guyana accounts for 15% of total conventional oil found since 2015. In addition, the Dorado-1 well in Australia has turned out to be a major gas and oil find. Another source of confidence is coming in the form of merger and acquisition activity. Transocean’s $2.7 billion bid for Ocean Rig in September could be a sign that the ultradeepwater outlook is picking up. US shale remains a bright spot, although infrastructure constraints are capping activity. Both Schlumberger and Halliburton warned in their second-quarter earnings reports that lack of infrastructure could hurt their activity and revenue in the region. Recent news reports indicate that those restraints may not be resolved until next year.

Specific Features of Mergers and Acquisitions in the Transport Industry

The article defines the role of the transport system in formation of the industrial infrastructure of the world economy in order to determine the trends to increase the efficiency of transport infrastructure in the conditions of globalization of the world economy. The authors have considered M&A processes as the most efficient means to improve the efficiency of operation of transport companies. The main reasons have been identified which motivate owners of transport companies to such types of reorganization as mergers or acquisitions. Both external and internal factors influencing the value of transport companies in mergers and acquisitions have been systematized. it was proved that one of the most priority options for the sustainable development of both an individual enterprise and the domestic economy is transnational integration transformation into forms of mergers and acquisitions. According to this scenario, the expected result is not only an increase in the company's value, but also an increase in profits.

Network Structure and Consolidation in the U.S. Airline Industry, 1990–2015

We study the effect of consolidation on airline network connectivity using three measures of centrality from graph theory: Degree; Closeness; and Betweenness. Changes in these measures from 1990 to 2015 imply: (i) the average airport services a greater proportion of possible routes; (ii) the average origin airport is fewer stops away from any given destination; and (iii) the average hub is less often along the shortest route between two other airports. Yet, we find the trend toward greater connectivity in the national network structure is largely unaffected by consolidation—in the form of mergers and codeshare agreements—during this period.

Comparative Pre and Post Merger Financial Analysis of Selected Indian Pharmaceutical Companies

A business may grow either by internal expansion or by external expansion. The focus of this paper is to study external expansion. A firm acquires a running business and grows overnight through corporate combinations, most common of these, is in the form of mergers and acquisitions. This study is an exploratory study, and through this paper an attempt is made to find an impact of acquisition on liquidity, solvency & financial risk, profitability and profitability of the acquiring company post merger as compared with pre period. For the purpose out of total 14 mergers, 10 mergers happening between the year 2000-01 to 2013-14, have been taken up for the study. A 3 year pre and post data of total of 17 variables of each of the selected mergers are taken from CMIE PROWESS 4.15 database and paired sample t-test is conducted (on statistical software of SPSS) to test the four hypothesis framed to fulfill the objectives of the study. Through this study it can be concluded that there is significant difference in liquidity post merger as compared with pre, but there is no significant difference in solvency& financial risk, profitability and operational efficiency for the sample of selected mergers.

Impact of Greenfield FDI versus M&A on growth and domestic investment in developing Asia

A large literature establishes the growth-enhancing benefits of foreign direct investment (FDI) flows into emerging market economies in general. Conventional wisdom holds that FDI is a preferable form of external financing compared to other types of capital flows because of its stabilizing properties. While this might hold true largely for FDI flows of the Greenfield variety, in reality, a greater share of FDI to emerging economies in general and Asian economies appears to be in the form of mergers and acquisitions (M&A). Do all types of FDI flows produce similar macroeconomic benefits? This paper empirically explores whether the type of FDI flow, i.e. Greenfield versus M&A, matters in the way it impacts economic growth and domestic investment for a large panel of developing Asian economies over 1990–2013. We find Greenfield FDI contributes positively to economic growth while FDI in the form of M&A appears to have no significant growth influence. We also find that the effects of Greenfield FDI on domestic capital formation are stronger and larger relative to M&A flows.

Network Structure and Consolidation in the US Airline Industry, 1990-2015

We study the effect of consolidation on airline network connectivity using three measures of centrality from graph theory: Degree, Closeness, and Betweenness. Changes in these measures from 1990 to 2015 imply: i) the average airport services a greater proportion of possible routes, ii) the average origin airport is fewer stops away from any given destination, and iii) the average hub is less often along the shortest route between two other airports. Yet, we find the trend toward greater connectivity in the national network structure is largely unaffected by consolidation, in the form of mergers and codeshare agreements, during this period.

The creation and further development of the corporate structure based on processes of mergers and acquisitions

The article explores the issue of privatization based on processes of mergers and acquisitions. The analysis of the stages of the integration of the companies on the basis of reorganization processes. Addresses the issue of financing the operations consolidation companies. The special role in the creation and further development of the corporate structures occupy the processes of mergers and acquisitions. The basis of the integration of the companies using the processes of mergers and acquisitions, business development and the investment component of the mechanism of realization of association of companies with accounting and evaluation of effectiveness data, corporate action for participants of the integration process. However, the practice of creating and developing corporate structures based on the processes of merger and acquisition companies indicates that is not developed fully the organizational mechanism of the data management processes at an early stage, as well as the methodology of estimation of efficiency of corporate development in terms of mergers and acquisitions. One of the most significant reasons for this situation, there is insufficient processing phase of the mechanism of corporate procedures for mergers and acquisitions of the aggregated results of the integration process and the overall efficiency of corporate development. Analysis of the content of integration processes on the basis of merger and acquisition companies allowed to highlight the most important typological signs data processes, which should include: the type of integration of the companies; national affiliation of companies that join together; the attitude of companies towards mergers and acquisitions; how to combine building companies; the terms of mergers and acquisitions; mechanism for mergers and acquisitions; the nature of the integration of the companies. As a result of the fact that integration processes based on mergers and acquisitions require substantial financial resources, as well as complex further complex corporate changes company-initiated, correct and accurate evaluation and selection of companies for mergers and acquisitions is a condition of effectiveness data integration processes. Valuation of the company for the purpose of merger and acquisition can be carried out within the methods and models of the two major approaches: the valuation of the company; evaluation of the value of the company equity share in equity or stake. The peculiarity of the decision-making on the use of a particular method of financing transactions in the merger and acquisition companies is the need to determine not only the efficiency of financing structure for the absorbing side, but also external conditions, in which the acquiring company. Such external conditions that influence the choice of a particular financing structure include: conditions of taxation of the holders of the target company, the nature of the market assessment of future mergers and acquisitions, the degree of asymmetry of a distribution of information between absorption and the target company. Decision on restructuring of the activities of the corporate structure in the form of mergers and acquisitions is, above all, achieving greater efficiency of companies within the new corporate merger. Evaluation of the effectiveness of the development of the corporate structure in terms of mergers and acquisitions can be defined on the basis of two fundamental approaches differ: a prospective and retrospective.

Shareholder's Value Creation in M&A. A Case of Indian Construction Industry

The Indian Government has identified infrastructure as one of the key sectors for economic development. 45% investment of infrastructure goes towards construction, and it is the major employer also. The construction sector contributes around 10% to the Indian gross domestic product (GDP). The industry is growing at a high rate with 40% funding coming from private sector. India is poised to be the third largest construction market by 2025. The industry also has witnessed several business combinations small or big in the form of mergers and acquisitions (M&As) and is about to increase further. This study provides an overview of the most recent M&A in construction industry and expectations for the future. The data of the construction industry M&A have been collected from Centre for Monitoring Indian Economy (CMIE) database. The event study methodology has been used to find the abnormal return (AR) to the bidder shareholders and their expectations from the deal. It has been found that the M&A activity has increased the value to the shareholders of the bidder firm to an extent of 2.2% cumulative abnormal return (CAR) over a period of 180 days around the merger. This study helps to understand the rational of M&A in construction industry and guides the practice managers about M&A decisions. When M&A is mostly understood as value destroying for bidders, construction industry proves to be an exception.

The Processes of Consolidation and Effectiveness of Commercial Banks in the Years 2008-2013

The paper analyzes the mergers and acquisitions in the banking sector in Poland, and determined their impact on the structure of the sector and its effectiveness. The analysis was conducted between 2008 and 2013. In the analyzed sector was found growing concentration of capital in the form of mergers and acquisitions. All indications are that this trend will be maintained in subsequent years. Dominant share in the Polish banking sector are entities controlled by foreign investors, but in the period has been a slight decrease in this regard. In the analyzed period made as a result of mergers and acquisitions, we can observe an increase of concentration of the banking sector. In the period 2008-2013 there was a decrease in effectiveness of commercial banks; operation, which was caused by deteriorating macroeconomic situation. It can be said that the continuous consolidation processes in the period 2008-2013 have not influenced an improvement of financial results in the analysed sector, but the effects of these processes can be seen only in the long term.

The Manager and the Merger

Once a cottage industry consisting of many scattered providers, health care has become an industry of large organizations and multi-institutional systems. Various organizational combinations continue to occur, especially in the form of mergers, affiliations, and the creation and expansion of health care systems. In the midst of this ongoing dramatic change, the role of the individual manager remains essentially unchanged in concept, but the arena in which that role is pursued is rapidly changing. Areas of responsibility are becoming broader, the groups overseen by individual managers are becoming larger, and many of the older "principles" of management are being tested and strained. Today's health care manager is learning that survival and success depend more than ever on flexibility and adaptability.

The particularity of preparing statements and the role of audit when performing reorganization: merger and acquisition in Russia and foreign countries

When looking for synergy effect companies in Russia and foreign countries resort to reorganization in the form of merger and acquisition To explain of merger and acquisition transactions the Russia legislation applies the institute of universal legal succession. IFRS and US GAAP applies the term of business unification which is understood as the transaction with the result the buyer gets the control. Comparing basic regulations of relative national standards in European countries, we stipulate the continuing convergence with IFRS: application of purchase method for business combination transactions; identification the purchaser as an entity; treating assets and liabilities by fair value; preparing of consolidated financial statements according to IFRS. However, in spite of joining to EU, member countries have preserved the right to choose national accounting principles for separate reporting and for reporting of companies, whose securities are not traded. For accounting of goodwill the amortization is; the buyer is the entity-buyer by the contract and the merger is treated by the day of government registration. Convergence of national accounting standards to IFRS brings to formation of gaps with tax standards and increase of additional expenses for accounting time differences. Many companies conducting reorganization attract consultants and auditors to accompany transactions on all stages and to secure the due diligence. When Russia will from the 1st of January 2018 transfer to international audit it will ensure the unique approach, raise of quality and increase of confidence of users to audited reporting, which is especially important in the period of reorganization of companies.

Organisational and leadership competencies for successful service integration

Purpose– The purpose of this paper is to describe a two-part study that has explored the organisational and leadership competencies required for successful service integration within a health consortia in Australia. Preliminary organisational and leadership competency frameworks were developed to serve as reference points as the consortia it expanded to cater for increased service demand in the midst of significant health reform.Design/methodology/approach– The study design is outlined, which involved literature reviews and semi-structured interviews with key stakeholders to ascertain the key determinants of successful service integration at both organisational and leadership levels.Findings– The literature reviews revealed little existing research specifically focused on the organisational and leadership competencies that underpin successful service integration. The themes from the literature reviews and semi-structured interviews informed the preliminary organisational and leadership competency frameworks. Both frameworks are outlined in the paper. Key determinants of successful service integration – at both an organisational and individual leadership level – are also presented.Research limitations/implications– This is a one-organisation case study and the competency frameworks presented are preliminary. However, the study findings provide a foundation for further research focusing on the longer-term success of service integration.Originality/value– Service integration in health is a new and emerging area, and there is little extant research exploring the organisational and leadership competencies underpinning its success. The competency frameworks presented in the paper may be of interest to other consortia and organisations engaged in service integration and other forms of merger and collaboration.

Activity of Central Eastern Europe Countries on Mergers and Acquisitions Market

Corporate growth often takes a form of mergers and acquisitions (MA however, during the recent years, emerging European countries have been very eager to take part in M&A projects. The main aim of the paper is to analyse the activity of Central and Eastern Europe (CEE) countries on the M&A market. DOI: http://dx.doi.org/10.5755/j01.ss.83.1.6864

University Under Structural Reform: A Micro-Level Perspective

National governments in several countries have promoted and carried out different forms of mergers, consolidations and alliances within their higher education systems in order to increase efficiency, effectiveness and governmental control to ensure that the universities more directly serve the national and regional economic and social objectives. This article sets out to explore structural reforms between and within universities from a micro-level perspective by investigating how academics make sense of and respond to the structural reforms, and how these reforms shape academic cultures, work practices and identities. Drawing upon in-depth interviews with 31 Finnish academics working under structural rearrangements, five core meanings of structural reforms are discerned: structural development as part of a flood of changes, expanding bureaucracy, profiling, searching for partners and branding. The paper concludes that structural reforms along with other managerial transformations foster experiences of competition and polarization at the departmental and individual level of academia, involving redefining what it means to be a successful academic.

Impact of mergers and acquisitions on stock prices: The U.S. ethanol-based biofuel industry

Corporate restructuring activities in the form of mergers and acquisitions (M&As) are ongoing in the U.S. ethanol-based biofuel industry. With regard to M&As, a widespread concern is about financial performance of an individual firm and stable financial performance of the overall industry. Using an event analysis method, this study explores the impact of recent M&As on stock prices and value of the firm of publicly traded ethanol-based biofuel industry between 2010 and 2012 in the United States. Results regarding the average cumulative abnormal returns of acquiring firms suggest that the market positively responded toward recent M&As in the industry. Around 4% positive growth on a 60-day event window was attributed to M&As using market-adjusted market portfolio. A significant positive 0.47% gain in cumulative returns in a 4-day event window and a 2.7% positive gain in a 10-day event window were suggested by this study.

Entrepreneurial Community in Kansas City: From Fragmented to Collaborative?

A small set of metropolitan areas in the United States can be considered second-tier life sciences or technology regions. Kansas City is such an emerging second-tier region. The Kansas City metropolitan area was able to grow a small but specialized knowledge economy because of the presence of large firms and subsequent efforts to strengthen entrepreneurship. This paper presents data from twenty interviews conducted in the summer of 2012 with regional experts, venture capitalists, and entrepreneurs who have successfully raised risk capital.The analysis of Kansas City’s entrepreneurial community shows, first, that large firms’ role as incubators of entrepreneurial startup companies seems to have diminished, and that there are weak connections between existing large firms and entrepreneurial ventures. Second, entrepreneurial exits in the form of mergers and acquisitions have increased and a small number of cashed-out entrepreneurs are reinvesting their funds and becoming engaged. Yet this process seems to be still in its beginning stages. Third, the region’s entrepreneurial community does not exhibit strong networking and collaboration. Rather, entrepreneurial ventures and industry connections exist much like “islands of excellence” without strong interconnections. Fourth, although the availability of funding has increased, local entrepreneurs perceive the accessibility and availability of funds - and the capacity local venture investors bring to the table - as limiting factors. At the same time, while the number of investment groups has increased, the investor community is still fragmented and not well connected. Fifth, the energy and collective effort to improve the Kansas City entrepreneurial community has increased and strengthened significantly since 2006 when a similar study was conducted.Various groups and organizations have ensured a thickening of the entrepreneurial support infrastructure in the form of creation of incubators, establishment of financial incentives to invest in entrepreneurial ventures (i.e. angel tax credits), and the addition of effective mentoring and networking events. Yet the analysis of the data shows that Kansas City faces the drawbacks of a region characterized by organizational thinness in the form of weak endowment of firms and organizations that can fuel the entrepreneurial pipeline and a lack of interaction and networks among key members of the entrepreneurial community, which keeps the entrepreneurial economy fragmented. To overcome organizational thinness and fragmentation, this paper suggests focusing policy efforts on connecting key actors in the entrepreneurial economy such as existing large firms, entrepreneurial ventures, universities, and funding and mentoring organizations.

Entrepreneurial community in Kansas City: From fragmented to collaborative?

A small set of metropolitan areas in the United States can be considered second-tier life sciences or technology regions. Kansas City is such an emerging second-tier region. The Kansas City metropolitan area was able to grow a small but specialized knowledge economy because of the presence of large firms and subsequent efforts to strengthen entrepreneurship. This paper presents data from twenty interviews conducted in the summer of 2012 with regional experts, venture capitalists, and entrepreneurs who have successfully raised risk capital.The analysis of Kansas City’s entrepreneurial community shows, first, that large firms’ role as incubators of entrepreneurial startup companies seems to have diminished, and that there are weak connections between existing large firms and entrepreneurial ventures. Second, entrepreneurial exits in the form of mergers and acquisitions have increased and a small number of cashed-out entrepreneurs are reinvesting their funds and becoming engaged. Yet this process seems to be still in its beginning stages. Third, the region’s entrepreneurial community does not exhibit strong networking and collaboration. Rather, entrepreneurial ventures and industry connections exist much like “islands of excellence” without strong interconnections. Fourth, although the availability of funding has increased, local entrepreneurs perceive the accessibility and availability of funds - and the capacity local venture investors bring to the table - as limiting factors. At the same time, while the number of investment groups has increased, the investor community is still fragmented and not well connected. Fifth, the energy and collective effort to improve the Kansas City entrepreneurial community has increased and strengthened significantly since 2006 when a similar study was conducted.Various groups and organizations have ensured a thickening of the entrepreneurial support infrastructure in the form of creation of incubators, establishment of financial incentives to invest in entrepreneurial ventures (i.e. angel tax credits), and the addition of effective mentoring and networking events. Yet the analysis of the data shows that Kansas City faces the drawbacks of a region characterized by organizational thinness in the form of weak endowment of firms and organizations that can fuel the entrepreneurial pipeline and a lack of interaction and networks among key members of the entrepreneurial community, which keeps the entrepreneurial economy fragmented. To overcome organizational thinness and fragmentation, this paper suggests focusing policy efforts on connecting key actors in the entrepreneurial economy such as existing large firms, entrepreneurial ventures, universities, and funding and mentoring organizations.

The Impact of Mergers on Bank Competitiveness in Nigerian Banking Industry

An inclusive merger mechanism became one option for the Nigerian banking industry in response to a Central Bank of Nigeria’s policy to increase the minimum paid-up share capital requirement of Nigerian banks from N2 billion to N25 billion in July 2004, with December 31, 2005 as deadline. More than half of the 89 banks in Nigeria as at July 2004 were engaged in one form of merger. The study objective gives insight into the effectiveness of economic policy reforms in the Nigerian banking industry. This study examines the merger’s impact on bank competitiveness between 2000 and 2009. The period was characterized by financial deregulation, the Global economic crisis, and bank restructuring programs. The panel data ordinary least squares approach is the methodology employed to investigate if there is any significant effect of merger on the bank competitiveness from the pre to the post merger periods, in order to detect whether bank mergers produce any performance gains as well as factors contributing to the competitiveness in the Nigerian banking industry.