Discuss the motives underlining Mergers & Acquisition and compare the Essay

Discuss the motives underlining Mergers & Acquisition and compare the outcomes of the different methodologies used to analyse M& - Essay Example Considering this aspect, the paper discusses the motives underlying M&A in different organisations. The objective of the article is to explore as to why organisations opt for executing M&A strategy. Furthermore, the paper also compares about the outcomes of different methodologies that are used in analysing the impact of M&A. Table of Contents Abstract 2 Literature Review 4 Overview of Merger & Acquisition 4 Nature of Merger & Acquisition 4 Motives Underlying M&A 5 Comparative Analysis of M&A 10 References 13 Literature Review Overview of Merger & Acquisition Merger & acquisition (M&A) which is also acknowledged as takeover is regarded to be an important strategy that use by various organisations in recent days in order to accomplish higher economies of scale. According to Lahovnik (2000), M&A is considered as one of the most prevalent approaches of organisations in today’s global businesses. The incorporation of local market into international economy, improvement of financia l market along with liberalisation and deregulation procedure strongly supports the approach of M&A. Schoenberg (2009) stated that M&A provides a common way for organisations in terms of accomplishing quick growth and rapid market entry. ... Such activities are usually voluntary in nature and often lead towards a new corporate identity. Merger can be aggressive or friendly in nature and in this procedure, the acquirer exercise full control on the acquired organisation. Gaughan (2007) described merger as grouping of two or more than two organisations where only a single organisation can sustain. Sudarsanam (2003) stated that M&A is implemented interchangeably. He defined that merger is a procedure where organisations share their resources in order to accomplish mutual objectives, but the shareholders still retain their ownership in the newly formed organisation. On the basis of the study conducted by Picot (2002), M&A indicates number of different transactions ranging from acquiring as well as selling of undertakings, agreements, collaboration and joint ventures to the establishment of organisations or corporate progression that certify individuality of dealings, transformation in legal form, preliminary public offering a nd reorganisation. Jagersma (2005) stated that merger is the arrangement of two or in excess of two organisations in establishment of a new entity or creation of a holding company. On the other hand, acquisition is the buying of shares and assets of other organisation in order to accomplish administrative powers. Motives Underlying M&A Carline & et. al., (2009) has described three motives for organisations to engage in M&A that comprise cooperation motive, hubris motive and intervention motive. Every motive has its own inference in relation to the advantages of organisations adopting as well as implementing M&A. Lemnsic & Maslennikova (2008)