Fjendtlige overtagelser: En værdiskabende kontrolmekanisme

Anders Normann

Student thesis: Master thesis

Abstract

The main objective of this thesis is to investigate whether recent hostile takeovers in the pharmaceutical sector have been driven by disciplinary causes, and if so, have they created value for the shareholders. In doing so, this thesis takes on a case‐study approach, in which four recent ‘megadeals’ are analysed in depth. The analysis is based on, both some of the traditional measures used to investigate disciplinary takeovers, as well as a number of qualitative parameters that are difficult to integrate in traditional empirical investigations. The analysis is structured as three separate sections, that each contributes to the overall understanding of the research question. The first section investigates the target companies’ pre‐transaction performance, as well as the management’s focus on shareholder wealth prior to the transaction. This analysis revealed that three of the companies have underperformed in the period prior to the transaction, and that among two of these companies, management has departed from the objective of maximising shareholder wealth. The second section investigates the strength of the target companies’ internal control mechanisms (i.e. corporate governance principles), and whether the management team in the target companies has engaged in activities that sought to avert the takeover. This analysis revealed that all four companies had weakened internal control mechanisms and that in all transactions management fought against the takeover. The final section investigates the target companies’ post transaction performance, as well as the management’s focus on shareholder wealth, and compares these results with the pretransaction results. This is done in order to assess the transactions impact on performance in the target companies. This analysis reveals that only in one of the four cases does the transaction create value for the target shareholders. The main conclusion is that two out of the four transactions are driven by disciplinary causes, and only in one of these cases does the transaction create value for the target shareholders. Although it seems that in both cases, the transaction does revert management’s attention towards maximising shareholder value. Another interesting result from the analysis is that it seems that the remaining two transactions are driven by the acquirers’ strategic situation.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2015
Number of pages99