z-logo
open-access-imgOpen Access
Misvaluation: another explanation for the failure of corporate acquisitions
Author(s) -
John F. Price
Publication year - 2013
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv11i1c9art2
Subject(s) - blame , mergers and acquisitions , valuation (finance) , accounting , business , actuarial science , finance , psychology , social psychology
Every year growth strategies of corporations mean that billions of dollars of acquisitions are approved by boards and senior executives. Yet studies show that 50 percent or more of these acquisitions are unsuccessful. What goes wrong? In this article I argue that much of the blame for these well documented failures stems from weaknesses with the standard valuation methods themselves and the difficulties with implementing the methods. By focussing on the role of the CEO and boards, I suggest a number of steps that could reduce the frequency and size of these failures.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.
Having issues? You can contact us here