Merrill DataSite Releases New Comments: New Report Analyzes Effect of M&A on Product Quality

Share Article -- M&A has little – if any – adverse effect on products over time – even as the price of the product is changed.

Merrill DataSite

New report analyzes effect of M&A on product quality.

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A recent study carried out by Harvard Business School Assistant Professor, Albert W Sheen, looking into the effects that mergers and acquisitions have on companies' products and services has shown that M&A has little – if any – adverse effect on products over time – even as the price of the product is changed.

The report allays long-held beliefs in business communities that mergers can potentially hit companies' stock prices, job security and – crucially for consumers – product price and quality. The difficulty in tracking the impact on product quality following M&A was that quality is a more inherently subjective trait to track than pricing, which can be easily quantified and assessed through facts and figures. In attempting to quantify the idea of quality, Sheen looked at back issues of Consumer Reports, the comparative consumer product review magazine that has been ranking competitive brands according to quality since 1936. The magazine bases its assessment of quality on in-house testing and customer surveys, giving Sheen decades worth of data to examine.

Sheen said that after a merger deal, the quality of products – or, at the very least – their capabilities and functions often increased, with manufacturers seeking to incorporate all the positive points of products involved in the merger into single marketable entities. For example, Sheen said, “If one vacuum brand had a retractable cord and the other did not, eventually, after the merger, they would both have retractable cords.”

The report has been accepted for publication in the Journal of Finance, and Sheen said that the ultimate lesson to be taken from the research is that M&A activity between consumer goods companies actually result in better value for consumers. He concluded, “I think it confirms a lot of the positive reasons companies give when they engage in mergers.”

About Merrill DataSite

Merrill DataSite is a secure virtual data room (VDR) solution that optimises the due diligence process by providing a highly efficient and secure method for sharing key business information between multiple parties. Merrill DataSite provides unlimited access for users worldwide, as well as real-time activity reports, site-wide search at the document level, enhanced communications through the Q&A feature and superior project management service - all of which help reduce transaction time and expense. Merrill DataSite’s multilingual support staff is available from anywhere in the world, 24/7, and can have your VDR up and running with thousands of pages loaded within 24 hours or less.

With its deep roots in transaction and compliance services, Merrill Corporation has a cultural, organisation-wide discipline in the management and processing of confidential content. Merrill DataSite is the first VDR provider to understand customer and industry needs by earning an ISO/IEC 27001:2005 certificate of registration – the highest standard for information security – and is currently the world’s only VDR certified for operations in the Europe, United States and Asia.

As the leading provider of VDR solutions, Merrill DataSite has empowered more than two million unique visitors to perform electronic due diligence on thousands of transactions totalling trillions of dollars in asset value. Merrill DataSite VDR solution has become an essential tool in an efficient and legally defensible process for completing multiple types of financial transactions.

For more information, please contact Merrill DataSite: Tel: 1-866-399-3770;
Email: info(at)datasite(dot)com; Web:

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Catherine Malone
Merrill DataSite
since: 12/2010
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