Merger Outcomes Research Articles

The Union Pacific/Southern Pacific Rail Merger: A Retrospective on Merger Benefits

This retrospective case study of merger efficiencies focuses on the 1996 merger of two large, U.S. rail networks. Information on the public record permits some evaluation of pre-merger efficiency claims, and the weighing of those claims against regulatory and antitrust standards. Access to additional public and non-public information also permits at least a preliminary determination that a number of the claimed efficiencies were plausibly merger-specific and actually realized post-merger. This is contrary to skepticism expressed about merger efficiency claims, both generally and with respect to this particular rail merger, and thereby illustrates the value of doing retrospective studies of merger outcomes.

The Tully-Fisher Relation in Coma and Virgo Cluster S0 Galaxies

We use the Tully-Fisher relation (TFR) to compare the behavior of S0 and late-type spiral galaxies. We determine circular velocities based on stellar kinematics derived from stellar absorption line spectroscopy for 10 S0's in the Coma Cluster and eight S0's in the Virgo Cluster. We combine these results with similar measurements of 13 Coma S0 galaxies obtained previously. We find that there is only a small offset, ΔmH ~ 0.2, in the H-band luminosity at a given circular velocity, vc ~ 200 km s-1, between S0 and late-type spirals. This result implies a similar total H-band mass-to-light ratio (within an effective radius) among disk galaxies of different Hubble types. As the older stellar population in S0's is dimmer, this suggests a somewhat larger fraction of stellar mass in these S0's than in late-type spirals. We also find that the relation between (I- and H-band) luminosity and vc for the S0 galaxies is at best poorly defined and has a scatter of ~1 mag, significantly larger than the TFR for late-type spirals, where the observed I- and H-band scatter is σ ~ 0.3–0.5 mag. This substantial scatter confirms the original findings of Dressler & Sandage and is similar to that found in a study by Neistein and coworkers of 18 nearby S0 galaxies in the field where σI ~ 0.7 mag, but differs from the small scatter found by Mathieu and coworkers, σI ~ 0.3 mag, for six nearby S0's. Our results suggest that differing formation histories can lead to S0's with diverse properties and that S0's are more likely to be the outcomes of minor mergers or some preprocessing in groups of galaxies falling into clusters, rather than simply late-type spirals that have been stripped of their gas but are kinematically preserved. We suggest that it is likely that many mechanisms, such as slow encounters, tidal interactions, and gas stripping, may have occurred in the lifetimes of the galaxies and produced the heterogeneous class of S0's that are observed today.

Breaking up is hard to do? An analysis of termination fee provisions and merger outcomes

We examine the provision of termination fee clauses in merger agreements between 1989 and 1998. Target-payable fees are observed more frequently when bidding is costly and the potential for information expropriation by third parties is significant. Fee provisions appear to benefit target shareholders through higher deal completion rates and greater negotiated takeover premiums. We conclude that target-payable fees serve as an efficient contracting device, rather than a means by which to deter competitive bidding. Bidder fee provisions appear to be used to secure target wealth gains in deals with higher costs associated with negotiation and bid failure.

Mergers in South African higher education: theorising change in transitional contexts

Drawing on a study of five merger cases in recent South African higher education, this article examines why in each case, the mergers proceeded despite intense opposition from the entities affected and in a form and manner different from that envisaged by their state designers. It considers too, the inadequacies of existing merger theories to explain these two factors and draws on contingency theory to show how the merger outcomes were the product of a complex interplay between governmental macro-politics and institutional micro-politics in a context of political transition. It also exposes the assumption that policy implementation is a rational process in which institutional practice mirrors the formal intentions of government planners, arguing that the merger process in South Africa has to date been marked by behaviour and action that has been both irrational and incoherent as well as not necessarily in the interests of the higher educational process.

The Process and Impact of Trust Mergers in the National Health Service: A Financial Perspective

Mergers in the UK National Health Service have been Justified by their perceived benefits. This article reports the findings from a study exploring the financial outcome of trust mergers. The authors found that financial deficits in constituent trusts, anticipated management cost savings and their reinvestment in services are important drivers for merger However, savings achieved in the first two years following merger were below target and there was a lack of transparency in how savings had been reinvested. The merged trusts were able to partially address equity issues, a theme that emerged during the merger process. This article highlights important issues that need to be considered when planning mergers and reconfigurations.

The Process and Impact of Trust Mergers in the National Health Service: A Financial Perspective

Mergers in the UK National Health Service have been justified by their perceived benefits. This article reports the findings from a study exploring the financial outcome of trust mergers. The authors found that financial deficits in constituent trusts, anticipated management cost savings and their reinvestment in services are important drivers for merger. However, savings achieved in the first two years following merger were below target and there was a lack of transparency in how savings had been reinvested. The merged trusts were able to partially address equity issues, a theme that emerged during the merger process. This article highlights important issues that need to be considered when planning mergers and reconfigurations.

NPM merger maniaLessons from an early case

A central doctrine of NPM requires the adoption of commercial management techniques to address the espoused goals of saving money and improving collaboration and service co-ordination. This article examines the evidence base for NPM mergers and uses study data to explain how two ingrained features of professional work helped to produce unintended outcomes at an early UK case involving a specialist mental health provider and an acute trust. The emergence of a de facto mental health trust within the merged entity arose from senior professionals' capacity to ‘buffer’ the work of colleagues from the rationalizing spectre of the merger. The persistence of ‘loosely coupled’ practices and structures restricted improvements in collaboration and service co-ordination. It is argued that these two enduring characteristics of professional organization will shape the outcomes of future NPM mergers in mental health care e.g. the creation of social care trusts and mental health ‘super-trusts’) and in other fields such as higher education.

Toward a Framework of Corporate Merger Processes and Outcomes: A Behavioral Perspective#

Traditionally, the merger literature has examined mergers and acquisitions from a strategic or financial perspective, largely overlooking important behavioral issues. In this paper, we present a comprehensive behavior‐based framework of merger processes and outcomes designed to provide more academic rigor to the study of the behavioral aspects of the merger process. The proposed framework combines and synthesizes established merger‐related behavioral concepts and relationships with new ones that are not encompassed within the current literature. #An earlier version of this paper was presented to the Human Resources, Labor Relations, and Careers track of the 1999 Southern Management Association Conference in Atlanta, GA.

Breaking Up is Hard to Do? An Analysis of Termination Fee Provisions and Merger Outcomes

This paper provides large-sample evidence pertaining to the use of and wealth effects associated with provisions for termination fees in merger agreements between 1989 and 1998. The evidence suggests that target termination fee clauses are an efficient contracting device through which target managers compensate bidders for the costs associated with bid negotiation and the potential for information expropriation by third parties. While target fees truncate a normal bidding process, target shareholders gain from higher completion rates and greater negotiated takeover premiums in deals that include target termination fee clauses. Our findings regarding bidder fee provisions indicate that these clauses are used to lock-in a portion of target wealth gains in deals with higher negotiating costs and greater costs associated with bid failure. Compensation for bidder fee provisions appears to take the form of concomitant target fee provisions, and lower bid premiums.

Mergers, MNES and innovation—the need for new research approaches

A merger wave on an unprecedented scale has recently been sweeping through the Western world. Many studies have demonstrated the unimpressive economic outcome of most mergers. This article argues that an important reason for disappointing long-term performance is the underestimated difficulties of integrating idiosyncratic technologies in unified product platforms. Instead of focusing on new product development, engineers and designers are drawn into lengthy harmonisation issues. An expanded research agenda is proposed, including the role of special interests in driving merger proposals, the impact of mergers on engineering creativity and innovation, and the identification of industries in which firm trajectories of scale and size, ultimately ending in mergers can be compared with the alternative dynamics of de–mergers, knowledge-based networks and research-based start-ups.

Old Parties in a New Germany

With unification of the two parts of Germany in 1990, the parties and other political institutions of West Germany were extended to the former German Democratic Republic. The Communists had ruled with the forced support of several satellite parties, called bloc parties. These possessed elements of affinity with the CDU/CSU and the FDP in West Germany, and merged with those two parties. In the elections of 1990, the CDU/CSU and FDP both benefited from these mergers; by 1994, the FDP had declined sharply in the East, while the CDU/CSU continued to prosper. The difference in the outcome of the party mergers stems from the differing organizational structures of the parties. The CDU/CSU was large, decentralized, relatively non-ideological and pragmatic in coping with the merger, while the FDP was small, elitist, centralized and ideological. It felt threatened by the size and outlook of its East German allies and preferred reduced electoral influence to the perceived threat to unity posed by its eastern organization.

Nuclear matter and its role in supernovae, neutron stars and compact object binary mergers

The equation of state (EOS) of dense matter plays an important role in the supernova phenomenon, the structure of neutron stars, and in the mergers of compact objects (neutron stars and black holes). During the collapse phase of a supernova, the EOS at subnuclear densities controls the collapse rate, the amount of deleptonization and thus the size of the collapsing core and the bounce density. Properties of nuclear matter that are especially crucial are the symmetry energy and the nuclear specific heat. The nuclear incompressibility, and the supernuclear EOS, play supporting roles. In a similar way, although the maximum masses of neutron stars are entirely dependent upon the supernuclear EOS, other important structural aspects are more sensitive to the equation of state at nuclear densities. The radii, moments of inertia, and the relative binding energies of neutron stars are, in particular, sensitive to the behavior of the nuclear symmetry energy. The dependence of the radius of a neutron star on its mass is shown to critically influence the outcome of the compact merger of two neutron stars or a neutron star with a small mass black hole. This latter topic is especially relevant to this volume, since it stems from research prompted by the tutoring of David Schramm a quarter century ago.

Understanding and Championing the Merger Process: Key Leadership Roles for Successful Outcomes

Mergers can effectively achieve both financial results and enhancements of quality. The nurse executive plays a vital role in the success of merger activities and has the opportunity to emerge as one of the leaders of the process. A systems approach to cost, quality, and service must be captured for successful merger outcomes to occur. But, in order for the nurse executive to be effective, he or she must understand and champion the merger process, critical roles, and challenges during the merger as well as use efficient communication methods to work effectively with physicians, reporting staff, and hired consultants.

Understanding and Championing the Merger Process: Key Leadership Roles for Successful Outcomes

Mergers can effectively achieve both financial results and enhancements of quality. The nurse executive plays a vital role in the success of merger activities and has the opportunity to emerge as one of the leaders of the process. A systems approach to cost, quality, and service must be captured for successful merger outcomes to occur. But, in order for the nurse executive to be effective, he or she must understand and champion the merger process, critical roles, and challenges during the merger as well as use efficient communication methods to work effectively with physicians, reporting staff, and hired consultants.

EUVE J0317 — 855: a rapidly rotating, high-field magnetic white dwarf

Spectropolarimetric observations of the extreme-ultraviolet (EUV) source and high-field magnetic white dwarf EUVE J0317 - 855 (= RE J0317 - 853) in the wavelength range 4200-7200 A reveal a strongly structured circular polarization spectrum with a peak polarization of 8 per cent. The strongest features in the polarization spectrum are attributed to Hoc 2s0-3p1, 2s0-3pO and Hf3 2s0-4f-1, 2s04fO and 2s0-4p1 in a magnetic field of 100-300 MG. The phase-averaged data are modelled using centred and off-centred dipole field structures, and a reasonable fit to the data was obtained for a dipole of strength Bd=450 MG displaced from the centre of the star by 35 per cent of the stellar radius and viewed at a mean angle of 30 0 -60 0 to the dipole axis. The wavelength-averaged circular polarization data show variations at a period of 725 ± 10 s, consistent with the photometric period of 725 s reported by Barstow et al. We also report EUV photometric variations on a period of 725.5 ± 0.8 s. The EUV light CUlVe is double-peaked, a possible signature of surface abundance inhomogeneities, in contrast with the optical light curve which is single-peaked on the same period. We show that the optical photometric and polarization variations are most likely caused by changes in the surface-averaged field strength and the line-of-sight projected field structure with rotational phase, as would be expected from an oblique rotator model. The high rotation rate, high mass and age discrepancy with a close DA white dwarf companion (LB 9802) suggest that EUVE J0317 - 855 may be the outcome of a double-degenerate merger.

Trade Union Mergers in British and Australian Television Broadcasting

A complex set of forces facing trade union organizations has meant that union restructuring vis‐à‐vis merger activity has been a prominent feature of many Western labour movements in the 1980s and 1990s. This paper is located in these structural developments, and its main contribution lies in the insights provided by an in‐depth examination of recent union merger activity in commercial television in the UK and Australia. In contrast to the work of Undy et al. (1981), the results suggest that union mergers are influenced by more than changes in membership patterns, and that the delineation of merger categories may be far more complex than what has previously been identified by their model. It is argued, too, that the nature of the forces and the processes that led to the broadcasting union mergers in the UK and Australia were significantly influenced by the different institutional contexts of both countries. Finally, and related to this, it would appear that union merger outcomes (at least in the short term) are linked to the preceding processes by which merger is brought about. One policy implication of this is that anything other than a case‐by‐case evaluation of union mergers may be misleading.

Merger propensity and merger outcomes among British unions, 1986‐1995

This article focuses on the relationship between merger propensity and merger success in British trade unions. Using survey data it reveals that more unions seek merger than achieve it; most mergers in the period are accounted for by few unions. However, some merger discussions are protracted and the determinants of propensity are distinct from those of success.

The impact of merger outcome, bid order, payment method and managerial resistance on stock returns to bidders in multiple-bidder merger contests

Prior studies find that stock returns to bidders depend on merger outcome, bid order, payment method and managerial resistance. Using a sample of bidders in multiple-bidder merger contests, we find that these variables are associated with one another. Significant associations between these variables imply that their effects on bidders' stock returns should be examined jointly. Our regression results indicate that only bid order explains bidders' stock returns in multiple bidder contests. This is true even after controlling for merger outcome, payment method and managerial resistance.

Stable Cartels with a Cournot Fringe

The notion of an industry structure characterized by a small group of dominant firms plus a competitive fringe has a long tradition. More recent work explores conditions under which such a pattern constitutes an equilibrium, assuming collusive behavior among one group of firms and price-taking behavior within the fringe [2; 3; 4; 5; 6; 14; 17]. The alternative case of a Courot fringe is analyzed briefly in Spulber [22, 471-73] and more extensively in Martin [14]. Here we adopt the framework of this literature and build on it by analyzing the size and uniqueness of the stable cartel when the fringe is Coumot; endogeneity of Courot versus Bertrand behavior within the fringe, given the stable cartel; possible endogeneity of the Stackelberg sequence of play between the cartel and the fringe; and effects of excludability from the cartel. Welfare effects are also briefly analyzed. Alternatively, cooperation within a cartel is equivalent to the outcome of horizontal mergers in the absence of synergies. As such, this paper presents a contrasting result to the analysis of exogenous Cournot mergers in Salant, Switzer, and Reynolds [18], endogenizes the merger decision, and demonstrates how a theory of mergers can be predicated on a Cournot fringe.

Agns: Demography and Remnants

In this contribution I shall first briefly review the arguments suggesting that most galaxies pass through a quasar or AGN phase early in their lifetime, perhaps concurrent with bulge formation. Then, as a footnote to the paper by van der Marel, I will discuss how relic black holes in quiescent galaxies could reveal themselves by the occasional flares resulting from tidal disruption of stars. In conclusion, I shall briefly discuss the phenomena associated with binary black holes, arguing that these are the likely outcome of galaxy mergers.