mm ugm yogyakarta, 18 december 2010 group 3 ap-14 : bayu setiaji nureni susilowati
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Corporate Strategy Dr. Amin Wibowo, MBA. Gaining and Sustaining Competitive Advantage – Chapter 14 MERGERS AND ACQUISITION STRATEGIES Jay B. Barney. MM UGM Yogyakarta, 18 December 2010 Group 3 AP-14 : Bayu Setiaji Nureni Susilowati Sri Muniati. Outline. - PowerPoint PPT PresentationTRANSCRIPT
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Gaining and Sustaining Competitive Advantage – Chapter 14
MERGERS AND ACQUISITION STRATEGIES
Jay B. Barney
MM UGM Yogyakarta, 18 December 2010
Group 3 AP-14 :o Bayu Setiaji
o Nureni Susilowatio Sri Muniati
Corporate StrategyDr. Amin Wibowo, MBA
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Outline
1. The value of merger and acquisition strategies
2. Mergers and acquisitions and Sustained Competitive advantage
3. Organizing to Implement a Merger or Acquisition
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The value of merger and acquisition strategies
• Depends on the market context within which these strategies are implemented
• Enables a firm to exploit competitive opportunities or neutralize threats; reduce its cost or increase its revenues and strategy will be economically valuable.
• Merger and acquisition between strategically unrelated firms and related firms
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The value of merger and acquisition strategies
• Merger and acquisition between strategically unrelated firms cannot be expected to generate superior economic profits for both bidder and target firms
• Merger and acquisition between strategically related firms the economic value of these two firms combined is greater than the economic value of these two firms as separate entities
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The value of merger and acquisition strategies
Types of Strategic Relatedness:
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The value of merger and acquisition strategies
Types of Strategic Relatedness:
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The value of merger and acquisition strategies
Types of Strategic Relatedness:
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The value of merger and acquisition strategies
Motivation to engage in Mergers an Acquisition:
• The desire to ensure firm survival
• The existence of Free Cash Flow
• Agency problem between bidding firm manager and equity holders
• Managerial Hubris
• The possibility that some bidding firm might earn economic profit from implementing merger and acquisition strategies
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Mergers & acquisitions and Sustained Competitive Advantage
Strategies:
• Valuable, rare and private
• Valuable, rare and costly to imitate
A bidding firm may exploit unanticipated sources of strategic relatedness with a target. This unanticipated sources of relatedness can also be a source of economic profits for bidding firms
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Organizing to Implement a Merger or Acquisition
• Historical differences between between bidding and target firms may make the integration of different part of a firm created through acquisitions more difficult.
• Bidding firms need to estimate the cost of organizing to implement a merger or acquisition strategy and discount the value of a target by that cost
• However, organizing to implement a merger or acquisition to implement a merger or acquisition can also be a way in which bidding and target firms discover and anticipated economies of scope
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