Problems regarding the status of the newly resolving

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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 Melding corporate – Linking different financial and control systems – Building effective working relationships (particularly Building when management styles differ) when – Resolving problems regarding the status of the newly Resolving acquired firm’s executives acquired – Loss of key personnel weakens the acquired firm’s Loss capabilities and reduces its value capabilities 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 Ineffective excessive premium for the target company. excessive • Transaction value is driven by “comparable” Transaction acquisitions rather than by a rigorous assessment acquisitions 1–21 Problems in Achieving Acquisition Success: Large or Extraordinary Debt • High d...
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