TY - JOUR
T1 - Section 3. General issues in management
T2 - The benefits of a pre-deal purchase price allocation for acquisition decisions: An exploratory analysis
AU - Zülch, Henning
AU - Detzen, Dominic
AU - Wünsch, Martin
AU - Wulf, Torsten
AU - Meißner, Philip
PY - 2013/1/1
Y1 - 2013/1/1
N2 - This paper analyzes the benefits of a pre-deal purchasing price allocation (pre-deal PPA), which acquirers have come to integrate into an acquisition process to examine the effects of a potential acquisition on the acquirer's financial statements. The authors take a management perspective and investigate if the tool improves the comprehensiveness and quality of acquisition decisions. Based on an exploratory analysis using the results of semi-structured interviews with 24 accounting professionals from 19 Germany-based companies, the authors conduct a qualitative content analysis to identify the method's benefits in the context of friendly acquisitions. The results suggest that, subject to cost-benefit considerations, a pre-deal PPA increases decision quality and leads to more comprehensive acquisition decisions. Furthermore, the paper proposes several best practice approaches to improve the implementation of a pre-deal PPA.
AB - This paper analyzes the benefits of a pre-deal purchasing price allocation (pre-deal PPA), which acquirers have come to integrate into an acquisition process to examine the effects of a potential acquisition on the acquirer's financial statements. The authors take a management perspective and investigate if the tool improves the comprehensiveness and quality of acquisition decisions. Based on an exploratory analysis using the results of semi-structured interviews with 24 accounting professionals from 19 Germany-based companies, the authors conduct a qualitative content analysis to identify the method's benefits in the context of friendly acquisitions. The results suggest that, subject to cost-benefit considerations, a pre-deal PPA increases decision quality and leads to more comprehensive acquisition decisions. Furthermore, the paper proposes several best practice approaches to improve the implementation of a pre-deal PPA.
KW - Decision comprehensiveness
KW - Decision quality
KW - M and A process
KW - Pre-deal PPA
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M3 - Article
AN - SCOPUS:84887227022
VL - 11
SP - 59
EP - 68
JO - Problems and Perspectives in Management
JF - Problems and Perspectives in Management
SN - 1727-7051
IS - 1
ER -