Most of the cases on M&As have their focus on the value of an individual deal (synergies, price, integration dilemmas). In the case series "Acquisition Tide in the Fine Chemicals Industry", we take another standpoint. Our objective is to describe how managers' selections to make an acquisition and to determine the acquisition cost are likely to be affected by the amalgamation task in their sector and their adversaries' actions.
Due to investors’ pressure to concentrate their portfolios, top specialty and fine chemicals players such as Degussa, Clariant and Rhodia entered into important fine chemicals acquisition in 2000 and overpaid. Later, this resulted in financial turmoil and decreasing stock prices. The fact that the other firms overpaid, despite publicly accessible signals from stock markets signaling the over payment, and the nature of the chemicals industry and direction, are clear indications for irrational herd behavior.
PUBLICATION DATE: May 01, 2006 PRODUCT #: INS423-PDF-ENG
This is just an excerpt. This case is about STRATEGY about STRATEGY & EXECUTION
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