Decision-making from a risk assessment perspective for Corporate Mergers and Acquisitions

<Para ID="Par1">Corporate Mergers and Acquisitions (M<InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$ { \& }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mo>&</mo> </math> </EquationSource> </InlineEquation>As) are notoriously complex, and risk management is one of the essential aspects of the analysis process for decision-making on M<InlineEquation ID="IEq2"> <EquationSource Format="TEX">$$ { \& }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mo>&</mo> </math> </EquationSource> </InlineEquation>A deals. Empirically, we see that some M<InlineEquation ID="IEq3"> <EquationSource Format="TEX">$$ { \& }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mo>&</mo> </math> </EquationSource> </InlineEquation>A transactions are not successful in part because of the increased exposure to correlated sectors, suggesting that the merged entity possesses increased risk in the market. This motivates our research on risk evaluation processes for corporate M<InlineEquation ID="IEq4"> <EquationSource Format="TEX">$$ { \& }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mo>&</mo> </math> </EquationSource> </InlineEquation>A deals. In this paper, a decision making scheme using a reasonable risk measure is introduced and surveyed. Numerical examples are presented. Copyright Springer-Verlag Berlin Heidelberg 2015