A critical review of the empirical literature on Mergers and Acquisitions

  1. 1. Assignment task 1

Merger and acquisition activity is experiencing a boom, with corporations such as Google, Apple, Twitter and Yahoo spending billions of dollars in 2013 acquiring businesses.  Whilst such activity is often predicated on the basis of increasing shareholder returns, empirical research in finance indicates that short run impacts are insignificant (Firth, 1980; Franks and Harris, 1989) and long run impacts are largely negative (Sudarsanan and Mahate, 2003), suggesting that the real motivation for merger and acquisition activity relates to other factors such as empire building.


Through a critical review of the empirical literature on Mergers and Acquisitions assess the proposition stated above.



Firth, M. (1980). Takeovers, shareholder returns and the theory of the firm.  Quarterly Journal of Economics, 94, 235–260.

Franks, J. and Harris, R.S. (1989). Shareholder wealth effects of corporate takeovers: the U.K. experience: The impact of acquisitions on firm performance: A review of the evidence 1955–1985.  Journal of Financial Economics,  23,225–249.

Sudarsanam, S. and Mahate, A.A. (2006), Are friendly acquisitions too bad for shareholders and managers? Long-term value creation and top management turnover in hostile and friendly acquirers. British Journal of Management, 17 (special issue), S7–S29.


  1. Assessment criteria

Presentation: this includes consideration of general presentation issues (such as page layout, use of paragraphs, accurate spelling, and compliance with presentation instructions) but, more importantly, the presentation of citations in the text and accurate referencing, in the correct format. Please ensure that you consult the very detailed instructions on this provided in the module handbook: all the necessary information is provided there. If you cite sources in the text and do not include them in the list of references, the assumption will be made that you have not in fact consulted these sources but have copied material from another text which included them. This is plagiarism and attracts severe penalties. It is therefore essential that you check your text very carefully to ensure that all citations are listed as references [2 marks].

Use of literature: Under this heading the extent and quality of your sources will be assessed. You are expected to demonstrate that you have undertaken an independent literature search so your list of references should include more than the sources to which you have been directed by the suggested reading. You are also expected to be able to distinguish authoritative sources: these are books and journal articles which have academic authority. Professional magazines, newspaper articles and web sites may be referred to if particularly relevant but should not comprise the majority of your references  [4 marks].

Problem solving, application of theory to issues and practice: under this heading, your ability to demonstrate understanding of issues raised in the literature, including methodological issues, will be assessed, primarily in your approach to answering the question set. Your discussion of the issues posed in the question should reflect your understanding: you should be able to present an argument, outlining alternative views (derived from your reading) and presenting evidence that supports these and arriving at a conclusion which you have justified from the literature and from examples. Your answer to the question should be clearly focused: read the question carefully and refer back to it frequently while writing your answer to ensure that you are not wandering off the point and including irrelevant material [10 marks]

Critical approach to sources: under this heading your ability to reflect on the literature you have read will be assessed. You should be able to identify similarities and differences between authors’ arguments and methods and to use such comparisons to support your arguments. You should be able to demonstrate your own thinking where the questions set require this by presenting an argument and supporting it by reference to evidence that you have collected [4 marks]


  1. Presenting coursework for assessment

Assignments must be presented in the following format:

Assignments must be word-processed in 11 point Arial font and double spaced

All pages must be numbered

The assignment must be presented with an assignment statement of originality that is signed, have a front cover showing the programme title, module number and name, title of the assignment, name of the person submitting the work, student number and submission date

Margins must be as follows: Top: 1 inch, Bottom: 1 inch (2.5 cm), Left: 1.25 inches, Right: 1.25 inches (3.2 cm)

Harvard referencing must be used

Assignments not complying with this format will be returned to students unmarked.


  1. Assignment length

The length of this assignment is limited by a set number of words (max. 2000) to contribute towards the development of writing skills and to ensure all work is assessed equitably. We therefore require you to complete your assignments within the number of words specified in the assignment brief.

You will need to think carefully about how best to explain your case within the permitted number of words (2000), using, for example, an appropriate mix of text, drawings, diagrams and tables, where relevant, supplemented by information contained in appendices, if applicable.

The specified word count (2000) refers to the main body of the report and does not include front cover, title page, contents page, executive summary, reference list, bibliography or appendices.  The word count does include headings, tables and in-text citations, but not equations or diagrams.

Appendices themselves will not be marked. However, inappropriate use of appendices will be taken into consideration when awarding the final mark.

Words that exceed the maximum allowed will not be marked. If in doubt, you should discuss this with the Module Leader before submission.



Please use the three resources as the primary resources in this paper, the three resources are listed above (please refer to references above). Also, please combine these three resources with other strong resources to analyze, compare, find out methodology, summarize, etc. Please avoid using resources from “paper for you”, trade journals. Good resources should come from the academic papers, academic textbook, quality newspaper( such as new york times, wall street journals, etc.

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