Most of the cases on M&As focus on the value of an individual deal (synergies, cost, integration problems). Our main objective is regarding how managers' make their decisions for an acquisition and how establishing the acquisition cost will be influenced due to the amalgamation regarding their own business and their opponents' actions.
Driven by stockholder pressure to focus their portfolios, fine chemicals players and top specialty such as Degussa, Clariant and Rhodia entered into major fine chemicals acquisition in 2000 and overpaid. Later, this resulted in financial turmoil and decreasing stock prices. The fact that the other firms were overpaid, despite openly available signals from stock markets indicating the over payment, and the nature of the chemicals industry and management, are clear signs for irrational herd behavior.
PUBLICATION DATE: January 05, 2006 PRODUCT #: INS422-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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