In Business Development, Mergers & Acquisitions (M&A) have become an increasingly attractive growth opportunity among companies over a long period of time. Nowadays, there is hardly a day where current developments of ongoing M&A transactions or speculations about presumed M&A deals cannot be followed in the daily press. Other external growth opportunities, such as strategic alliances, joint ventures, and franchising (inorganic growth) are still behind M&A as a strategic alternative. Organic growth, which can be achieved by increasing sales personnel, developing new products or expanding in new geographical areas, presents another alternative. Nonetheless, M&A are often preferred because they provide a faster way to enter new markets and to make operations more efficient. Moreover, the constantly increasing global competition, strengthened through lowered market entry barriers and trade enhancing conventions between several countries, contribute to an increased consolidation pressure among businesses.
However, it turned out that M&A are fairly sensitive projects that are vulnerable to fail. It is proved that a huge number of M&A did not deliver on their promises. The majority of failed M&A are a result of mismanagement during the Post Merger Inte-gration (PMI) when processes have to be adjusted, personnel need to be teamed up and corporate cultures have to be reconciled.
During the PMI, synergies, as the dominant motive for M&A, which are identified before the transaction, have to be realized. However, synergies can frequently not be realized due to a poor quality of information, a high level of complexity or bad implementation strategies. In spite of these difficulties, many companies have not established a well-functioning synergy management and synergy tracking in their organizational structures yet.
This thesis deals predominantly with aspects of synergy management whereby the main focus is on synergy tracking as a support function of the synergy management. An emphasis is on the analysis of realization efforts that need to be done by the management during the PMI. To provide a solution and ease the aforementioned issues of synergy realization, a synergy tracking tool, which serves as an effective support instrument during the PMI is developed.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Background & Purpose
- Methodology
- Mergers & Acquisitions
- Definition and Distinction of Mergers & Acquisitions
- Selected Types of Mergers & Acquisitions
- Strategic Alignment Approach
- Attitude Approach
- Regional Approach
- The M&A Process
- The Pre Merger Phase
- The Transaction Phase
- The Post Merger Integration Phase
- Synergies in Mergers & Acquisitions
- Definitions and Distinctions of Synergy Terms
- Typical Synergy Potentials in Mergers & Acquisitions
- Functional specific Synergy Potentials
- Financial specific Synergy Potentials
- Management specific Synergy Potentials
- Synergy Pitfalls
- The Connection between Synergies and the Price Premium in M&A
- Synergy Management and Synergy Tracking in the M&A Process
- Fundamentals of Synergy Management and Synergy Tracking
- Requirements on Synergy Tracking during M&A Projects
- Identification of Synergy Potentials
- Quantification of Synergy Potentials
- Planning of Synergy Potentials and Realization Measures
- Monitoring and Reporting
- Challenges for Synergy Tracking during Mergers & Acquisitions
- Risk Factor Human Capital in Mergers & Acquisitions
- Institutional Integration of Synergy Tracking
- Valuation of Synergy Potentials in Mergers & Acquisitions
- Company Valuation as a Framework for Synergy Valuation
- Fundamentals
- Discounted Cash Flow Analysis
- Periodic Net-Synergy Cash Flows
- Calculation of Discount Rates for Synergy Valuation
- Assessment of Discounted Cash Flow Analysis
- Consideration of Synergy Realization Probabilities
- Synergy Tracking Tool for Post Merger Integration
- Introduction
- Structure
- Single Business Plan
- Synergy Action Plan
- Merged Business Plan
- Synergy Business Plan
- Allocation of Synergy Effects
- Variance Analysis
- Application Example: NewCo
- Summary and Future Perspectives
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis aims to develop a synergy tracking tool for the post-merger integration process in mergers and acquisitions (M&A) projects. The tool is designed to facilitate the identification, quantification, planning, and monitoring of potential synergy effects, ultimately contributing to successful post-merger integration. The main themes explored in the thesis include:- Synergy Management and Tracking: The thesis investigates best practices and challenges associated with managing and tracking synergy realization in M&A projects.
- Valuation of Synergy Potentials: The thesis examines various methods for valuing synergy potentials, specifically focusing on discounted cash flow (DCF) analysis.
- Post-Merger Integration (PMI): The thesis highlights the importance of synergy tracking within the PMI process, emphasizing its role in achieving the intended benefits of the merger.
- Risk Factors: The thesis acknowledges the inherent risks associated with M&A projects, particularly highlighting the human capital factor and its potential impact on synergy realization.
- Synergy Tracking Tool Development: The core of the thesis lies in developing a comprehensive synergy tracking tool that addresses the identified challenges and requirements, contributing to more efficient and effective post-merger integration.
Zusammenfassung der Kapitel (Chapter Summaries)
- Chapter 1: Introduction – This chapter provides the background and purpose of the thesis, outlining the importance of synergy tracking in M&A projects. It also explains the methodology employed throughout the research.
- Chapter 2: Mergers & Acquisitions – This chapter delves into the definition and distinction of mergers and acquisitions, exploring various types and the M&A process, particularly focusing on the pre-merger, transaction, and post-merger integration phases.
- Chapter 3: Synergies in Mergers & Acquisitions – This chapter explores the concept of synergy, defining different types of synergy and identifying potential pitfalls. The connection between synergies and the price premium in M&A transactions is also discussed.
- Chapter 4: Synergy Management and Synergy Tracking in the M&A Process – This chapter examines the fundamentals of synergy management and tracking, outlining requirements for effective synergy tracking during M&A projects. It also addresses challenges, risk factors, and institutional integration of synergy tracking.
- Chapter 5: Valuation of Synergy Potentials in Mergers & Acquisitions – This chapter focuses on valuation methods for synergy potentials, particularly exploring the application of discounted cash flow analysis (DCF) and the consideration of synergy realization probabilities.
- Chapter 6: Synergy Tracking Tool for Post Merger Integration – This chapter presents the development of a comprehensive synergy tracking tool, outlining its structure, functionalities, and application example. The tool is designed to facilitate the effective management of synergy realization during the post-merger integration process.
Schlüsselwörter (Keywords)
The core keywords and focus topics of this thesis encompass synergy management, synergy tracking, post-merger integration (PMI), mergers and acquisitions (M&A), discounted cash flow analysis (DCF), synergy valuation, and human capital risk. These concepts are central to the development and application of a practical synergy tracking tool for enhancing the success of M&A projects.- Citar trabajo
- Vincent Schade (Autor), 2010, Development of a Synergy Tracking Tool for the Post Merger Integration, Múnich, GRIN Verlag, https://www.grin.com/document/231175
