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Research studies into mergers and acquisitions have found that often companies are acquired not for the shareholders’ benefit, but for the benefit or self-interest of the acquiring company’s management.
sir how is it possible for the management to gain from an acquisition? And if the management does gain then it will not be only them, the entire shareholders of the acquiring company gain, thorough their respective appreciation of stake, right?
This is really Paper SBL.
They can gain because of more power and status running a larger businesses. They likely gain from being paid a bigger salary due to running a bigger company. They gain because their position is likely to be more secure given again a larger company.
Benefit and self-interest is not purely financial.
I found this line in the middle on an answer in my AFM exam kit.
And thank you for your reply it’s clear to me now!
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