Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis
This research explores how global cosmetic players sense emerging market demand for new technologies and products, seize opportunities through the acquisition of core competencies that they needed, and transform their global value chain. The aim of this paper to assess the prerequisites of reciproca...
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2020
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Online Access: | https://doi.org/10.3390/admsci10020027 https://doaj.org/article/3f5d7e9eae134bfa9ab3b0e8df0107c1 |
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ftdoajarticles:oai:doaj.org/article:3f5d7e9eae134bfa9ab3b0e8df0107c1 2023-05-15T15:09:34+02:00 Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis Andrejs Čirjevskis 2020-04-01T00:00:00Z https://doi.org/10.3390/admsci10020027 https://doaj.org/article/3f5d7e9eae134bfa9ab3b0e8df0107c1 EN eng MDPI AG https://www.mdpi.com/2076-3387/10/2/27 https://doaj.org/toc/2076-3387 doi:10.3390/admsci10020027 2076-3387 https://doaj.org/article/3f5d7e9eae134bfa9ab3b0e8df0107c1 Administrative Sciences, Vol 10, Iss 27, p 27 (2020) acquisitions core competence knowledge transfer synergy real options Political institutions and public administration (General) JF20-2112 article 2020 ftdoajarticles https://doi.org/10.3390/admsci10020027 2022-12-31T14:46:11Z This research explores how global cosmetic players sense emerging market demand for new technologies and products, seize opportunities through the acquisition of core competencies that they needed, and transform their global value chain. The aim of this paper to assess the prerequisites of reciprocal synergies in merger and acquisition (M&A) deals pursuing global growth. To achieve this aim, the author asked a research question: what is the best way to measure the competence-based synergies as added market value in M&A deals? To answer this question, the author researched the latest theoretical findings on the antecedents of synergy in the merger and acquisition processes. The valuation of reciprocal synergies with real options was discussed with a focus on input variables’ values. Based on in-depth content analysis, the ARCTIC (A—Advantage, R—Relatedness, C—Complexity of Competence, T—Time of Integration, I—Implementation Plan, C—Cultural Fit) framework was developed and tested. The author selected three case studies to test the methodology empirically, namely, L’Oréal’s Body Shop acquisition in 2006 and divestiture in 2017, the acquisition of The Body Shop by Brazilian’s Natura Group in 2017, and the acquisition of Avon Products by Natura that was announced in 2019. The model for the valuation of reciprocal synergies used and discussed real options with a special focus on input variables’ values. Article in Journal/Newspaper Arctic Directory of Open Access Journals: DOAJ Articles Arctic Administrative Sciences 10 2 27 |
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Directory of Open Access Journals: DOAJ Articles |
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English |
topic |
acquisitions core competence knowledge transfer synergy real options Political institutions and public administration (General) JF20-2112 |
spellingShingle |
acquisitions core competence knowledge transfer synergy real options Political institutions and public administration (General) JF20-2112 Andrejs Čirjevskis Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis |
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acquisitions core competence knowledge transfer synergy real options Political institutions and public administration (General) JF20-2112 |
description |
This research explores how global cosmetic players sense emerging market demand for new technologies and products, seize opportunities through the acquisition of core competencies that they needed, and transform their global value chain. The aim of this paper to assess the prerequisites of reciprocal synergies in merger and acquisition (M&A) deals pursuing global growth. To achieve this aim, the author asked a research question: what is the best way to measure the competence-based synergies as added market value in M&A deals? To answer this question, the author researched the latest theoretical findings on the antecedents of synergy in the merger and acquisition processes. The valuation of reciprocal synergies with real options was discussed with a focus on input variables’ values. Based on in-depth content analysis, the ARCTIC (A—Advantage, R—Relatedness, C—Complexity of Competence, T—Time of Integration, I—Implementation Plan, C—Cultural Fit) framework was developed and tested. The author selected three case studies to test the methodology empirically, namely, L’Oréal’s Body Shop acquisition in 2006 and divestiture in 2017, the acquisition of The Body Shop by Brazilian’s Natura Group in 2017, and the acquisition of Avon Products by Natura that was announced in 2019. The model for the valuation of reciprocal synergies used and discussed real options with a special focus on input variables’ values. |
format |
Article in Journal/Newspaper |
author |
Andrejs Čirjevskis |
author_facet |
Andrejs Čirjevskis |
author_sort |
Andrejs Čirjevskis |
title |
Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis |
title_short |
Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis |
title_full |
Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis |
title_fullStr |
Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis |
title_full_unstemmed |
Valuing Reciprocal Synergies in Merger and Acquisition Deals Using the Real Option Analysis |
title_sort |
valuing reciprocal synergies in merger and acquisition deals using the real option analysis |
publisher |
MDPI AG |
publishDate |
2020 |
url |
https://doi.org/10.3390/admsci10020027 https://doaj.org/article/3f5d7e9eae134bfa9ab3b0e8df0107c1 |
geographic |
Arctic |
geographic_facet |
Arctic |
genre |
Arctic |
genre_facet |
Arctic |
op_source |
Administrative Sciences, Vol 10, Iss 27, p 27 (2020) |
op_relation |
https://www.mdpi.com/2076-3387/10/2/27 https://doaj.org/toc/2076-3387 doi:10.3390/admsci10020027 2076-3387 https://doaj.org/article/3f5d7e9eae134bfa9ab3b0e8df0107c1 |
op_doi |
https://doi.org/10.3390/admsci10020027 |
container_title |
Administrative Sciences |
container_volume |
10 |
container_issue |
2 |
container_start_page |
27 |
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1766340732594946048 |