By Andreas Schertzinger, Prof. Dr. Dirk Schiereck
The basic economics of the ecu coverage and in particular the effect of the hot monetary obstacle at the monetary companies area tend to reason a wave of M&A transactions within the coverage zone. An occasion learn of the former M&A cycle within the eu coverage exhibits that M&A transactions on usual in achieving temporary price production. despite the fact that, there's a major dispersion between person transactions and, within the long-term, the typical M&A transaction destroys value.
Andreas Schertzinger identifies determinants of profitable transactions, reminiscent of transaction timing and diversifying transaction procedure, via a multivariate statistical research. case stories illustrate good fortune components in particular with regards to the behavior of transactions in larger element.
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Additional info for Creating Value in Insurance Mergers and Acquisitions
After acceptance of regulators, the deal is announced to the public, detailed information is provided to employees, and agreement of shareholders is advertised. As a final step, the post-merger management process is initiated. Strict controlling of achievement of milestones and realization of benefits, and early identification and management of integration risks are of particular importance. After this brief conceptual overview on M&A transactions in general, the following section shall now begin the analysis of the European insurance M&A market by examining current consolidation levels in the insurance industry, systematizing rationale for insurance M&A and developing hypotheses on further transactions in the European insurance market.
125) notes that the disciplining hypothesis requires an information efficient capital market, where valuation of the target suffers from ineffectiveness of current management. Capital market access Sautter (1989, p. 137) argues that M&A may improve access to external capital markets due to cost degression of fixed fees for capital market transactions. g. 62 Co-insurance effect Seth (1994, p. 432) defines the co-insurance effect as an increased debt capacity of merged entities (or reduced probability of insolvency given same financing structure).
26 2 Overview of M&A in the European Insurance Industry distinguishes procurement, production, distribution, and financial diversification. The definitions for scale and scope economies are not mutually exclusive. , geographies, products), not from increasing size. For example, Achleitner (1999, p. 144) argues that economies of scale are realized through horizontal transactions, and economies of scope from lateral transactions. X-efficiencies Efficiency measures output relative to required inputs for an individual firm.