Albrighton, Lewis Mark (1997) The acquisition process decision in United Kingdom companies. PhD thesis, University of Warwick.

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Abstract

While there has been extensive research on acquisitions primarily from a finance perspective, little research has specifically addressed the acquisition decision process This thesis is intended to address this problem by examining three areas A) How companies search for acquisitions and how they collect information, B) What criteria companies use to examine acquisitions and how these are applied, and C) How does experience and the management resources available influence the process and success.

Data on the acquisition process were collected using 51 interviews with 48 companies within the United Kingdom Additional data was collected from corporate reports and financial databases Success was measured using 3 scales based on Datta and Grant (1990).

All companies limited the industries that they searched in looking for potential acquisitions. There was, however, variation in how broad these limits were. Some companies limited the geographic areas that they searched This was correlated with higher success levels than those companies that operated global searches or did not explicitly limit the area they searched. The source of the idea to consider a specific acquisition was found to be correlated with success, with external ideas performing worse than internal ones. No relationship was found between levels of information collection and success.

As predicted by the finance literature most companies used discounted cash flow analysis as a decision criterion. Few companies, however, used only discounted cash flow analysis. Most also used, payback, accounting rate of return and earnings per share dilution The use of non finance criteria was also widespread However, these were not as important as finance criteria.

Discounted cash flow analysis was found not to affect success levels A number of explanations for this were explored.

Experience of acquisitions by the company and individuals concerned was found not to affect success Experience of the industry and company by the individual managing the project was, however, found to be positively correlated with success.

No simple relationships between success and management resources available, or the number of consultants used were found. However, a negative relationship between the use of merchant banks as advisers and one success measure used was found.

Item Type:	Thesis (PhD)
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance
Library of Congress Subject Headings (LCSH):	Corporations -- Decision making, Consolidation and merger of corporations, Managerial economics
Official Date:	February 1997
Dates:	Date Event February 1997 Submitted
Institution:	University of Warwick
Theses Department:	Warwick Business School
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Gray, S. J.
Extent:	xxvii, 468 leaves : illustrations, charts
Language:	eng

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