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critical part of acquisition process and could be very helpful not only in the pre-acquisition stage but also during the acquisition process as well as at post-acquisition stage (see Becher, 2001).

Finally, the best practices research in the field of merger and acquisition is usually done in the form of case studies but the quality and intensity of these studies vary widely (see Marks and Mirvis, 2001).

Performance and Success in M&A

As stated before companies often engaged in the series of acquisitions and merger activities and early studies such as Barney (1988), tend to show that related acquisitions performed better than other acquisition transactions. However, relatedness itself does not create value for acquiring companies but synergy is the vital factor that helps companies to generate abnormal returns from acquisition programs. For example, Barney (1988) showed that synergistic cash flow stemming from relatedness, which is unique and private creates abnormal returns for shareholders of acquiring firm.

However, later studies such as Hayward (2002), suggested that different level of relatedness results in various degree of success and moderately similar companies tend to be more successful than the companies that are highly similar or dissimilar in business or size to one another. He further concluded that if a firm experienced small losses in past acquisition in contrast to high losses or high gains then it has better chances of success in prospective acquisition. In addition, the timing of acquisition plays a vital role in success of the transaction and should not be too close or far-away from central acquisition (see Hayward, 2002). Similarly, Brown and Eisenhard (1997) argued that companies benefit differently depending upon their experimenting and timing of the merger and acquisition activities.

Moreover, when the acquiring company has some inimitable resources then it can create value by utilizing these resources in target's company as suggested by Capron and Pistre (2000). However, they also added that if the source of synergies is recognized in target firm than market associate expected gains to target firm due to the competition among potential bidders. Consequently, this competition raises the price of target firm and would create value for shareholders of the target firm but also lead to under performance of acquirer. Nevertheless, performance success through merger and acquisitions is still controversial among academics as pointed out by Cording et al (2002).

To resolve the issue Chatterjee (1992) measured the cumulative average of abnormal returns (CAAR) during the period of 11 months before the tender offer until 60 months after the tender offer. After studying the sample of 577 tender offers between the periods of 1963 to 1986; he suggested that net gain arises for the economy from these transactions but it does not necessarily create gains for everyone involved in merger and acquisition. More specifically, CAAR after 60 months were observed to be negative for unsuccessful bidders, zero for successful bidder and positive for target company. Furthermore, Chatterjee (1992) found much higher positive CAAR for restructured target 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。