Mergers and Acquisitions in Banking and Finance: What Works, What Fails, and Why

Ingo Walter, Oxford University Press, 2004
reviewed by Editor-in-Chief Lars Bjørn Falkenberg

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Mergers and acquisitions (M&A) are among the most powerful and flexible growth tools employed by companies of all sizes and in all industries. It is widely recognised that a well-timed purchase or a well-planned merger can boost both the immediate financial position and the long-term outlook for an organisation. On the other hand, these transactions can entail a company’s quick downturn if not set up and executed carefully, legally, and wisely.

The investment management industry has carried out M&A transactions on a large scale as part of a reconfiguration of the industry. The results have revealed that there are indeed both failures and successes. ‘Mergers and Acquisitions in Banking and Finance: What Works, What Fails, and Why’ aims at evaluating M&A as a key tool of business strategy to enhance shareholder value; in other words, ‘doing the right thing’. The author analyses whether the drivers, the basic economic concepts and the strategic principles that generally urge companies towards M&A are actually valid or not.

Just the extent of M&A in the investment management industry makes it an important subject to in investigate. The book focuses especially on the merger implementation process as a key to success or failure. On the cost side, the challenges of post-merger integration consistently present difficulties in achieving the expected economies of scope.

The book is written for academics and practitioners alike. Scrutinising both the strategic drivers and general assumptions behind M&A as well the actual experiences by investment management companies with regard to particularly the implementation process, the book represents a valuable tool for both audiences. The author reveals how complex it is to estimate whether mergers and acquisitions will lead to success as the M&A process is affected by not only internal business processes but also implications of external factors like regulations and market conditions.