Merger and Acquisition for Chemical Engineering -myassignmenthelp

Question: Discuss about theMerger and Acquisition for Chemical Engineering. Answer: Introduction Several strategies are adopted by the firms so as to enter into the new nation. Among these strategies one of the most common strategies that bigger firms adopt so as to enter into the new market is Merger and Acquisition (Bower, 2013). In merger two firms having almost same assets combine with each other so as to enter into the new market. Usually it is seen that one company is from the nation in which they want to enter while the other is a multinational companies. On the other hand Acquisition is a strategy in which one company takes over another firm. There are many MA that have been successful and some became unsuccessful. This is due to various kinds of reasons. This report highlights the various factors that make any merger and acquisition successful. Factors that makes merger and acquisition successful There are several internal and external factors that are present within the industry and makes Merger and Acquisition successful. Success of merger and acquisition depends on the impact that these factors have on the business (Cartwright and Cooper, 2014). Some of these factors are as follows: Choosing the right partner: It is essential for any company to make sure that they have chosen right company for making them as partner. In both merger and acquisition selecting a firm must be based on their past business records as well as the compatibility they can have with each other (Erel, Liao and Weisbach, 2012). In acquisition it is essential for the acquiring firm to make sure that the smaller firm must have potential to get developed as well as have enough of resources to capitalise upon. Trust among the parties: Since the organisation that will be formed by the merger and acquisition of two firms must have faith on each other. There are many types of dissimilarities that exist in between the firms that are joining hands and hence there can be higher chances that trust cannot be made (Bena and Li, 2014). A common minimum program for the staffs of both the companies needs to be made. Choosing a more reliable partner for business is essential for making it a success. Communication: If there is any gap that remain in the communication between the two companies then there is sure chance that merger or acquisition might fail. It is essential for the firms to make sure the each and every stakeholder that exist in both the firms needs to have idea about the plan of the company to have following Merger and Acquisition strategy (Bailey, 2014). The communication between the officials of the two companies also needs to be clear so that there must not be any issues while making the whole process workout. Quality of the plan: There must be effective plans made for acquisition so as to make sure that it remains successful. The better the plan for adopting and enforcement of merger and acquisition strategy, better the chances of firm getting success (Netter, Stegemoller and Wintoki, 2011). For increasing the quality of the plan it is necessary that all the stakeholders of firm take the decisions unanimously. Aligning the culture: If both the firms are from different regions of the world then it is a sure chance that they will have difference in their working cultures. It is crucial for the company to make sure that they align their cultures as well as respect each others values and ethics so as to work with a proper collaboration (Weber, Tarba and Reichel, 2011). Alignment of the culture should not just be made at the top executive levels but till the ground level so as to make sure that each level adds the value to the whole process. Examples of successful merger and acquisition post deal integration There are large numbers of successful MA that has taken place especially in the late 1990s. Some of the examples are as follows: Anheuser-Busch and Inbev: This was one of the most successful MA of all time. The income of both the company after adoption of this strategy was increased by 50%. They have become the major player in the US and China. Sales growth in the past five years has risen by 12.9%. EPS growth was 35.3%. Its growth profit margin was around 59.7% as well as operating profit margin was 46.7%. Shell and Royal Dutch Petroleum: In the petroleum industry it was considered as one of the best MA deals. The major reason for their success was their ability to adapt in the changing petroleum prices. They estimated to have an annual saving of around $2.5bn. P. Morgan and chase: This was considered as one of the major successful merger in the banking sector. This merger becomes successful because they both adopted each others culture in a better manner. This made them the largest bank of the United State. Despite of several hiccups in then performance at the start, this company managed to make success in their business. Disney and Pixar: In the film production industry it was the merger of two bigger names. This was a highly successful merger since they both respected each others competencies and had worked in collaboration so as to excel in their business. This is a perfect example of how trust on each other can be a major reason for the success of the MA. Exxon/Mobil: This was again a big merger that took place in the year 1999 that became a success story. Their revenue increased with such a fast speed that if they would have been a country then there revenue would have been 21st among the nations (The economist, 2012). This made them the largest listed integrated oil firm in the world. All these examples suggest that in the successful merger and acquisition various factors have played a significant role. Conclusion From the above report it can be concluded that there are larger number of Merger and Acquisitions took place in the past several decades. Out of them very few turned out to be a successful one. In the success story of any merger and acquisition several factors plays an essential role. There are many examples of successful merger and acquisition in the past that become successful. References Bailey, M.P., 2014. Mergers and acquisitions.Chemical Engineering,121(1), pp.59-60. Bena, J. and Li, K., 2014. Corporate innovations and mergers and acquisitions.The Journal of Finance,69(5), pp.1923-1960. Bower, J.L., 2013. Not all MAs are alike: And that matters. InMergers Acquisitions(pp. 27-36). Routledge. Cartwright, S. and Cooper, C.L., 2014.Mergers and acquisitions: The human factor. Butterworth-Heinemann. Erel, I., Liao, R.C. and Weisbach, M.S., 2012. Determinants of cross?border mergers and acquisitions.The Journal of Finance,67(3), pp.1045-1082. Netter, J., Stegemoller, M. and Wintoki, M.B., 2011. Implications of data screens on merger and acquisition analysis: A large sample study of mergers and acquisitions from 1992 to 2009.The Review of Financial Studies,24(7), pp.2316-2357. The economist, (2012), Oozing success. [Online] Available at: https://www.economist.com/node/21560226. [Accessed on: 17 April 2018]. Weber, Y., Tarba, S.Y. and Reichel, A., 2011. A model of the influence of culture on integration approaches and international mergers and acquisitions performance.International Studies of Management Organization,41(3), pp.9-24.