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Title: Mergers and acquisitions between Taiwanese enterprises
Author: Kuo, Kuo-Cheng
Awarding Body: University of Edinburgh
Current Institution: University of Edinburgh
Date of Award: 1999
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In recent years merger and acquisition (M&A) activities have increasingly claimed the attention of government officials, company management and the public in Taiwan. The primary purpose of this study is to examine merger motives and methods of payment and to compare the pre- and post-transaction performance of Taiwanese enterprises. The samples of mergers and acquisitions in Taiwan analysed in this study are relatively comprehensive and are the largest which have ever been collected for academic research. So the conclusions of this study have much greater validity than those found in previous work carried out on Taiwanese mergers. In brief, securing operational synergies is a very important merger motive for firms of all sizes. Large enterprises are motivated to take-over other firms by the desire to acquire market share while increasing corporate debt capacity or financing was more important for small acquiring enterprises than for large ones. Payment is made either by means of a cash offer or by an exchange of shares depending on tax and government regulations, the future prospects of the acquiring enterprise as perceived by the acquired enterprise's shareholders and the level of activity of the stock market. The results indicate that large and medium-sized acquiring enterprises achieve greater increases in their post-transaction operational and financial performance than do small and small-medium sized acquiring enterprises. The results of logit analysis indicate that profitability and changes in profitability are important variables for discriminating between acquired and non-acquired firms. The findings mean that firms with lower profitability have a significantly increased probability of being taken-over, but that smaller firms do not see a significant increase in the likelihood of being acquired. This implies that take-over discipline is strong for low profitability firms but is not strong for small firms. The take-over threat forces firms to improve their profitability rather than to increase their size. The empirical evidence as to the nature of the take-over mechanism of acquired firms supports the traditional theory of the firm.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available