Business Due Diligence In Foreign Acquisitions – the Influence of Acquisition Type, Target Environment, and Previous Experience
Lappalainen, Lotta (2012)
2012
Kuvaus
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Tiivistelmä
According to earlier studies firms implement acquisitions increasingly in order to accelerate their international activities, even though the failure rate in acquisitions is very high. Business due diligence is an important part of the acquisition process, as the basic reasons for failure in acquisitions can be discovered within this field. The purpose of this study is to analyze the different factors that the business due diligence process entails, as well as how its contents may vary depending on acquisition type, institutional environment, and previous experience. Acquisition types under focus are horizontal and concentric, and institutional environments analyzed are the ones of the Baltic and Nordic regions. The theoretical part focuses on business due diligence by approaching it through analyzing the acquisition and due diligence processes. The theoretical framework of the study is created based on the analysis of the three different factors and their possible influence on performing business due diligence.
The empirical part of the thesis discovers how the Finnish case company performs business due diligence and how it coincides with the theoretical part of the study. The main objective is to analyze whether and how the firm’s business due diligence process has differed depending on acquisition type, target institutional environment, and previous experience. The data for the empirical part of the study is collected via an in-depth interview to the case company’s head of the Mergers & Acquisitions department and with the help of documents and archival records provided by the case company.
The results of the empirical part indicate that the focus points of business due diligence vary between the Baltic and Nordic region, which means that the content of business due diligence is situational and not constant, as the theoretical part suggests. One issue that stands out from the two parts of the study is the fact that the case company’s greatest focus is on the management when performing business due diligence, whereas the theory on business due diligence does not press this issue at all.
The empirical part of the thesis discovers how the Finnish case company performs business due diligence and how it coincides with the theoretical part of the study. The main objective is to analyze whether and how the firm’s business due diligence process has differed depending on acquisition type, target institutional environment, and previous experience. The data for the empirical part of the study is collected via an in-depth interview to the case company’s head of the Mergers & Acquisitions department and with the help of documents and archival records provided by the case company.
The results of the empirical part indicate that the focus points of business due diligence vary between the Baltic and Nordic region, which means that the content of business due diligence is situational and not constant, as the theoretical part suggests. One issue that stands out from the two parts of the study is the fact that the case company’s greatest focus is on the management when performing business due diligence, whereas the theory on business due diligence does not press this issue at all.