Shareholder Value Creation in M&A. A case study of the GE-Alstom Deal

A large amount of the completed acquisitions worldwide destroy shareholder value for the acquirer. Nevertheless, M&A is still the most common strategy used by managers to grow a company, leading to shareholders doubting that their best interest is represented.
This thesis analyzes the reasons, as to why M&A tends to destroy value, based on best-practices and empirical research. The resulting value drivers are a guideline to avoid cer-tain mistakes, such as wrongly justified acquisitions, the overestimation of synergies or a flawed PMI.
A case study of General Electric’s acquisition of Alstom completes the picture of M&A value destruction. Especially since deal closing, GE has been struggling and eventually dropped from the Dow Jones Industrial Average in June and was downgraded in October 2018. This bad-practice example serves to illustrate the validity and applicability of the previously identified value drivers of M&A in order to prevent value destruction.