Unformatted text preview: Acquisitions Extraordinary debt Inability to
achieve synergy 1–19 Problems in Achieving Acquisition Success: Integration Difficulties
• Integration challenges include:
– Melding two disparate corporate cultures
– Linking different financial and control systems
– Building effective working relationships (particularly
when management styles differ)
– Resolving problems regarding the status of the newly
acquired firm’s executives
– Loss of key personnel weakens the acquired firm’s
capabilities and reduces its value
1–20 Problems in Achieving Acquisition Success: Inadequate Evaluation of the Target
• Due Diligence
– The process of evaluating a target firm for acquisition
• Ineffective due diligence may result in paying an
excessive premium for the target company.
• Transaction value is driven by “comparable”
acquisitions rather than by a rigorous assessment
acquisitions 1–21 Problems in Achieving Acquisition Success: Large or Extraordinary Debt
• High d...
View Full Document
This note was uploaded on 04/28/2013 for the course MGMT 491 taught by Professor S.cho during the Spring '12 term at Washington State University .
- Spring '12