Mergers and Acquisitions: Examples of Best Practice in Europe and Latvia

Saksonova, Svetlana; Kantāne, Irēna

doi:10.1108/s1569-375920160000098007

Cited by 16 publications

(12 citation statements)

References 4 publications

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“…These issues have been investigated by the authors Saksonova S. and Kantāne I. In the paper "Mergers and Acquisitions: Examples of Best Practice in Europe and Latvia" they concluded that in evaluating decisions on the possibilities for mergers and acquisitions Latvian firms and banks have to be guided by the most important results of this process: possible increases in foreign direct investment and the growth in market share (Saksonova S. and Kantāne I., 2016). Asset-liability management basically refers to the process by which an institution manages its balance sheet in order to allow for alternative interest rate and liquidity scenarios (Francis M. E., 2007).…”

Section: Literature Reviewmentioning

confidence: 99%

Financial Resources Management in Commercial Banks: Evidence From Latvia

Konovalova¹,

Caplinska²

2020

IJFR

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Financial resources management issues are relevant for each commercial bank. Those banks that operate with an excess of free financial resources lose profitability, but the liquidity of such banks is quite high. Other banks that conduct aggressive policy aiming to place all the available resources with maximum efficiency, are forced to seek solutions to the problem of locating additional liquid funds, in order to ensure timely fulfilment of liabilities. In this article, the authors analyze the state of the resource base of Latvian commercial banks, identify reserves for increasing the efficiency of banks and propose a methodology for optimizing the attraction and placement of resources in commercial banks. Since bank resources management involves two interrelated issues – equity capital management and management of liabilities (attracted and borrowed funds), the authors successively consider two sides of this process. Besides, the process of equity capital and liabilities management is inseparably linked with active transactions, i.e. with the use of resources, therefore the research also focuses on the interrelation between passive and active transactions of the bank and on the development of a methodology for optimizing the attraction and allocation of bank resources. The purpose of the research is to analyse passive operations in Latvian banks, to assess the formation of their resource base and its management, as well as to work out some recommendations on how to update the management of the combined (aggregate) resource base in Latvian commercial banks. The authors have put forward a following hypothesis: the decline in financial resources leads to an increase in the bank's efficiency, and vice versa, the increase in financial resources leads to an inefficient redistribution of funds in the banking activity. During the study, this hypothesis was justified. The theoretical and methodological basis for the research includes scientific works by Latvian and foreign authors, special economic literature, Latvian legislation, regulations of the Bank of Latvia and of the Financial and Capital Market Commission, recommendations of the Basel Committee on Banking Supervision, EU Directives. The authors used such research methods as economic analysis, method of comparison, economic grouping, statistical methods, etc. The application of the proposed methodology for optimizing the attraction and placement of resources is considered on the example of Latvian commercial banks.

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Section: Literature Reviewmentioning

confidence: 99%

Financial Resources Management in Commercial Banks: Evidence From Latvia

Konovalova¹,

Caplinska²

2020

IJFR

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“…M&As are perceived as one of the most important phenomena in modern economies (Kwoka, 2002) with their occurrence increasing in US, Europe and internationally (Steynberg and Veldsman, 2011;Faruk Genc and Zakaria, 2017). Their increased frequency could be the outcome of the perception held by several researchers in that it is a strategy for organisational growth even during a recession (Steynberg and Veldsman, 2011;Saksonova and Kantane, 2016;Campanella et al, 2016). Although some M&As are successful, a high percentage of them often fail (Epstein, 2004).…”

Section: Historical and Functional Perspectivesmentioning

confidence: 99%

“…A merger is the consolidation of two or more previously separate entities (companies) into a single organisation. On the other hand, an acquisition is the purchase of one company by another, in which the buyer keeps control (Saksonova and Kantane, 2016). Empirical evidence suggests that M&As offer opportunities for growth and enable companies to be more competitive both on a national and an international level (Schweizer, 2005;Riviezzo, 2013;Rossi et al, 2013;Tang and Metwalli, 2013;Lawlor, 2013;Hajbada and Donnelly, 2013;Alam and Ng, 2014;Wagner and de Hilal, 2014;Saksonova and Kantane, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…On the other hand, an acquisition is the purchase of one company by another, in which the buyer keeps control (Saksonova and Kantane, 2016). Empirical evidence suggests that M&As offer opportunities for growth and enable companies to be more competitive both on a national and an international level (Schweizer, 2005;Riviezzo, 2013;Rossi et al, 2013;Tang and Metwalli, 2013;Lawlor, 2013;Hajbada and Donnelly, 2013;Alam and Ng, 2014;Wagner and de Hilal, 2014;Saksonova and Kantane, 2016). However, it is reported that more than 60% of M&As fail to achieve the financial benefits expected (Marks and Mirvis, 2001) and lead to employee turnover (Hubbard and Purcell, 2001;Cooper and Finkelstein, 2004;Lawlor, 2013;Riviezzo, 2013;Wagner and de Hilal, 2014).…”

Section: Introductionmentioning

confidence: 99%

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Employee retention during Cooperative banks' mergers and acquisitions

Antoniou

Vrontis

Thrassou

et al. 2020

JGBA

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Although mergers and acquisitions are important for an organisation's future growth, they often result in high employee turnover. Employee retention though is an essential prerequisite for achieving the projected benefits for the newly formed organisation. The paper draws empirical evidence from a study that explored critical factors in retaining key employees, since their concerns and problems often lead to voluntary turnover and merger failure. The study utilises qualitative data, collected through in-depth semi-structured interviews and focus group discussions with 55 participants from the wider environment of the Cooperative financial services sector in Cyprus. At the time of the study, the sector was undergoing dramatic changes, eventually leading to a number of previously independent Cooperative credit institutions coming under state control and ownership. The number of these institutions was reduced from more than 90 to just 18, which were subsequently merged into the Cyprus Cooperative Central Bank, which itself was sold in 2019 to a larger banking organisation.

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“…Sectoral studies remain outside the scope of direct debate on sector rotation. It is curious that they give contradictory conclusions, in some cases confirming the significant influence of the business cycle on the financial characteristics of the business in the analysed industry [13], in other cases abstracting from this influence [14].…”

Section: Introductionmentioning

confidence: 99%

Are the Industry Cycles the Global Trend in Investment Activity?

et al. 2021

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Research background: According to the concept of sector rotation, industry cycles affect the investment attractiveness of companies. Industry cycles relate to business ones, and specific industries are preferred for investors depending on the phase of the latter. The scope of this concept application is portfolio investment management. However, we use it in a new way, assuming that the unfavourable phase leads to a decrease in the investment activity of companies in the corresponding industry. Purpose of the article: Since the concept of sector rotation claims universality, we reveal if the industry cycles are the global trend in investment activity. The research purpose is to test the hypothesis of an industry cycles’ impact on the dynamics of the investment activity in companies obtaining external financing. Methods: Using the concept of sector rotation, we suggest several industry groups and tested whether the peak of investment activity in each group falls on the expected favourable phase of the business cycle. In the context of global investment trends, this hypothesis should be confirmed at public companies of any sufficiently large financial market. For testing, Russian companies were selected. The growth rate of capital investments was used as an indicator of investment activity. Findings & Value added: It was revealed that the hypothesis about the impact of industry cycles on the investment activity of a business has the potential for further research. However, there is no sufficient evidence to consider the orientation of the investment behaviour of companies on industry cycles as a global trend.

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Mergers and Acquisitions: Examples of Best Practice in Europe and Latvia

Cited by 16 publications

References 4 publications

Financial Resources Management in Commercial Banks: Evidence From Latvia

Financial Resources Management in Commercial Banks: Evidence From Latvia

Employee retention during Cooperative banks' mergers and acquisitions

Are the Industry Cycles the Global Trend in Investment Activity?

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