The Synergy Trap: How Companies Lose the Acquisition Game - Hardcover

Sirower, Mark L.

Hardcover

ISBN 10: 0684832550 ISBN 13: 9780684832555

Publisher: Simon & Schuster Ltd, 1997

Synopsis

This study explains how companies often pay too much - and never realize goals of increased performance and market strength - in their quest to acquire other companies. Sirower investigates mergers across 28 measures of performance. He reveals that if the high risks taken by acquirers are to pay off, chief executives must act swiftly in making improvements to management and resolving corporate cultural differences, or face steep and debilitating losses to the parent company's own value. By examining such variables as method of payment and strategic relatedness, Sirower also provides a formal definition for synergies, or the specific increases in performance which the combined companies can realistically expect through acquisition. This expose argues that the tendency of managers to succumb to the "up-the-ante" philosophy in acquisitions often leads to disastrous ends in the hyper-competitive marketplace, and that companies must meticulously plan - and account for huge uncertainties - when deciding to enter the mergers game.

About this title

Review:

Robert A G. Monks and Nell Minow Principals of LensMark Sirower's book provides welcome and indisputable documentation of corporate management and director mistakes and abuses in the name of a vague concept of "synergy." "The Synergy Trap" will be an important aid to managers and directors who are evaluating business combinations, and to the shareholders who are evaluating the managers and directors.

About the Author:

Mark L. Sirower teaches business strategy and competitive analysis at the Stern School of Business at New York University. He speaks frequently on creating value through mergers and acquisitions for major corporations and in a variety of public forums. The Synergy Trap is based on his pathbreaking Columbia University doctoral thesis. He lives in Manhattan.

About this edition

• Publisher: Simon & Schuster Ltd
• Publication date: 1997
• ISBN 10: 0684832550
• ISBN 13: 9780684832555
• Binding: Hardcover
• Number of pages: 192