Mergers : theory and a survey of the motives of New Zealand public companies

Abstract

Much of the literature on merger motives has attempted to match mergers that take place with motives already documented in existing literature, or to ask managers what their motives might be for undertaking a merger in the future, again using motives already documented in the extant literature. In contrast, this study seeks to identify the actual motives of companies involved in mergers. This thesis sheds more light on merger motives in New Zealand, from the perspective of financial management, by conducting a survey of all publicly stated merger motives of companies listed on the New Zealand Stock Exchange involved in mergers between 14 July 1984 and 31 December 1994. The main finding was the identification of five previously undocumented motives: (1) to delist the company from the New Zealand Stock Exchange; (2) to gain listing on the New Zealand Stock Exchange; (3) to respond to deregulation, the opening of markets and increased competition; (4) to tidy up the structure of a group of companies; and (5) to become multinational. Comprehensive appendices are also included. The survey has resulted in a useful foundation study that provides essential factual knowledge for students, analysts, practitioners and investors in New Zealand.