Does perpetual measurement overestimates perceived synergy in mergers and acquisitions? case studies

Abstract

This thesis intends to examine the many components of synergy in mergers and acquisitions, emphasizing its measurement, estimate, and validation. While mergers and acquisitions have been the preferred approach for geographic penetration and survival in a competitive market, the failure rate of such transactions is between 70 and 90 percent, owing mostly to targeted overvaluation and overpaying. The study topics center on determining the period of perceived synergy realization, investigating the techniques of realizing perceived synergy, and validating the perceived synergy. The study used a qualitative research technique, combining descriptive and exploratory research, to examine the performance of five publicly listed firms that have gone through corporate acquisitions. The financial statements, income statements, cash flow statements, and annual reports are all examined as part of the performance evaluation. The research design is of the case analysis variety, which aids in narrowing down a broad issue and testing if the theory or model proposed can be used in a real-world context. This thesis adds to the existing literature by delving into the complex valuation of synergy, overpriced acquisitions, and the necessity for reliable synergy estimation and validation in mergers and acquisitions. The study's findings can help organizations make decisions during mergers and acquisitions, minimizing the chance of failure and increasing success rates.