Why Companies Do Not Pursue Attractive Mergers and Acquisitions
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Why Companies Do Not Pursue Attractive Mergers and Acquisitions ...

Chapter :  Terms and Definitions
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Definitions of Terms With Meanings Specific to this Study

There are a number of terms or expressions that that have highly specific meanings to this study. Several key ones that may also be used colloquially or have different meanings in different contexts are listed as follows:

  • Attractiveness: This is a multidimensional concept that summarises the conclusions reached by a company about candidates it has subjected to a thorough evaluation. If a candidate is found to be attractive, its acquisition is assumed to represent an opportunity. This is not meant to imply that the acquisition of the candidate necessarily would have been successful.
  • Focal period: This term refers to the period or phase in the acquisition process on which this study focuses. It begins with the end of the evaluation and ends when the acquiring firm either enters into negotiations with the candidate or makes a bid for it. The terms period and phase are used interchangeably.
  • Decision reversals: This expression is used interchangeably with forgone opportunities, failure to pursue, or withdrawal. All of these attempt to capture the notion that an acquisition candidate has been evaluated and found attractive, yet the prospective acquirer does not enter into negotiations or bid for the candidate. These terms also attempt to capture the notion that this failure is not a “classic” case of implementation difficulties, but rather often derives from an implicit or explicit decision in the organisation to reverse its previous position. Nutt (2002) refers to failed decisions that result from reversals or a lack of implementation. The emphasis of this study is on the former. It should be noted that whether an acquisition really represented an opportunity or not, particularly in light of changes that may have occurred in the organisation or the external environment since the evaluation, could beg the question raised by Bell, Bromiley, and Bryson (1998, p. 171) of “what is the metric…and who is the judge?” In this study, it is assumed that once a candidate has been thoroughly evaluated, it is attractive; that is, it is an opportunity.
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