The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School
ah! but size does matter? So did you spot something common in all the deals mentioned above? Different countries, different sectors, different CEOs, different motives… Ah! All were multi-billion gambles! Our further research led us to many such references by M&A experts about the right size of deals. BCG’s sparkling May 2008 report once again proved a handful. The report documents that during downturns, “Larger deals destroy progressively more value! Deals that are above $1 billion destroy nearly twice as much value as those under $1 billion!” So what’s the right M&A deal size during a recessionary period? The reports prove how targets that are worth more than “50% of the acquirer destroy nearly twice as much value as targets that are worth less than 10% of the acquirer.” The work by Towers Perrin and Cass, that compared the current M&A fever, with the previous two cycles (that peaked in 1989 & 1999) also supports this theory. The paper confirms how “medium-sized deals (those between $0.4 and $1.5 billion) continued to work and create value.” So there you stand corrected – mid-sized risks are the recommendation for an M&A transaction, especially during a downturn when those dimes get more precious in the backdrop of the ‘On Sale’ once-lucrative businesses! Dr. Paroutis of Warwick Business School sums up his argument as, “The key to winning with this [M&A] strategy during a downturn, will be buying for a good price.” Karna of Grant Thornton doubles-up as, “Given capital is scarce... the downturns represent unprecedented opportunities for value buys…” So there’s the question again: should M&As be undertaken during recession?
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM set to beat economic slowdown
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ah! but size does matter? So did you spot something common in all the deals mentioned above? Different countries, different sectors, different CEOs, different motives… Ah! All were multi-billion gambles! Our further research led us to many such references by M&A experts about the right size of deals. BCG’s sparkling May 2008 report once again proved a handful. The report documents that during downturns, “Larger deals destroy progressively more value! Deals that are above $1 billion destroy nearly twice as much value as those under $1 billion!” So what’s the right M&A deal size during a recessionary period? The reports prove how targets that are worth more than “50% of the acquirer destroy nearly twice as much value as targets that are worth less than 10% of the acquirer.” The work by Towers Perrin and Cass, that compared the current M&A fever, with the previous two cycles (that peaked in 1989 & 1999) also supports this theory. The paper confirms how “medium-sized deals (those between $0.4 and $1.5 billion) continued to work and create value.” So there you stand corrected – mid-sized risks are the recommendation for an M&A transaction, especially during a downturn when those dimes get more precious in the backdrop of the ‘On Sale’ once-lucrative businesses! Dr. Paroutis of Warwick Business School sums up his argument as, “The key to winning with this [M&A] strategy during a downturn, will be buying for a good price.” Karna of Grant Thornton doubles-up as, “Given capital is scarce... the downturns represent unprecedented opportunities for value buys…” So there’s the question again: should M&As be undertaken during recession?For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
ZEE BUSINESS BEST B SCHOOL SURVEY
IIPM Ranked No. 1 B-School In Global Exposre - Zee...
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
