Critical Factors of Pre - Acquisition Due Diligence in Cross – Border Acquisitions

Abstract

Pārrobežu pārņemšanai ir svarīga loma uzņēmumu stratēģiskajā attīstībā un starptautiskās darbības paplašināšanā. Promocijas darbā pētīti pirmspārņemšanas fāzē veicamā pirmspārņemšanas audita noteicošie faktori, to klāsts, izvirzītā hipotēze - pirmspārņemšanas fāzes kompleksais pirmspārņemšanas audits ir saistīts ar pārņemšanas panākumiem. Rezultāti atbalsta pieņēmumu, ka veiksmīgas pārņemšanas pirmspārņemšanas audita noteicošie faktori ir stratēģiskā partnera izvēle, uzņēmējdarbības potenciāls, cilvēkresursu zināšanas, finanšu faktori un pārņemšanas maksa, galvenā atziņa ir, ka uzņēmējdarbības potenciāls un cilvēkresursu zināšanas ir galvenie aktīvi, lai pārņemšanas fāzē varētu realizēt sinerģijas vērtības. Atslēgas vārdi: pirmspārņemšanas audits, informācijas asimetrija, organizāciju mācīšanās, apvienošana, pārņemšana, riska novērtējumus

Cross - border acquisitions play an important role in the corporate strategic development and international expansion. During the past decades, mergers and acquisitions were intensively researched through the lens of strategic management, corporate finance, behavioral finance etc. Despite the intense effort, the made progress is still fragmented and lacks unifying theories that approaches the whole acquisition process on the one side, and indepth research of critical factors on the other side. The dissertation topic intends to establish vital link between research and practice, deeply exploring infor mation asymmetry and role of exploratory learning in the pre - acquisition phase of cross - border acquisition. This thesis investigates the critical factors – and the scope of the due diligence, which is carried out in the pre - acquisition phase. Pre - acquisition due diligence theoretically conforms to the organizational learning theory, proposing that the more the acquiring firm learns about the acquisition target, the higher the probability of successful acquisition. The central hypothesis of the comprehensive model states that due diligence in the pre - acquisition phase is necessary for acquisition success. The empirical evidence is data sample of acquisitions made in the automotive manufacturing firms and their cross - border acquisitions in the European automot ive industry . The main results support the proposition that Choice of Strategic Partner, Business Capabilities and HR Knowledge and Financial Factors and Acquisition Premium are critical factors of due diligence needed for acquisition success. The main eff ort lies in pinpointing the specific area by which the business capabilities and knowledge transfer build the main asset in the realization of synergy values in the acquisition phase. In this context, the valuation of the business capabilities of the acqui sition targets is classified as the main challenge reflecting suitability of the acquisition price and establishing value generation from the combined firms in the post - acquisition phase. By studying acquisition risk and critical factors – both success and failure reasons – this research has tested and partially approved a theoretically sound assessment framework that can pre - determine the success or failure of planned acquisition efforts. From a practical standpoint, the research results provide acquisition management with proven method of performing the pre - acquisition evaluation of potential acquisition candidates. Such a reference offers critical factors evidence for firms with acquisition needs. Key words: due diligence, information asymmetry, organizational learning , risk assessment , mergers, acquisitions, cross - border acquisitions