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| Author: | Smit, H.T.J. Moraitis, T. |
| Title: | Serial acquisition options |
| Journal: | Long Range Planning
2010 : FEB, VOL. 43:1, p. 85-103 |
| Index terms: | options mergers consolidation investments strategic planning uncertainty |
| Language: | eng |
| Abstract: | The paper demonstrates the appropriateness of a real options mindset when valuing and selecting from strategic merger and acquisition alternatives as part of a serial consolidation strategy. Considering acquisitions as options may add significant insight to an adaptive and 'opportunistic' strategy, as the currently-envisioned acquisition trajectory is not regarded as static, but allows for the dynamic revision of targets and periodic adjustments in the number and pattern of investments, depending on market growth or unexpected adverse external developments. The proposed approach emphasizes how platform acquisitions effectively change the universe of future acquisition opportunities that are available to the firm and to its competitors as well. The most important point in the approach is that it provides a framework for directly integrating finance and acquisition strategy in an uncertain environment. |
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