Assessing the risk of M&A: Bruner's Disaster Framework applied to Berkshire Hathaway's Gen Re Acquisition

Author: Jr, Joseph Calandro

Source: Strategy and Leadership, Volume 36, Number 6, 2008 , pp. 20-27(8)

Publisher: Emerald Group Publishing Limited

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Abstract:

Purpose - <IT>This paper aims to acquaint managers with a little known mergers and acquisitions (M&A) diagnostic tool that made its debut in the book <IT>Deals from Hell - M&A Lessons that Rise Above the Ashes</IT> (NY: Wiley, 2005) by Robert Bruner.</IT> Design/methodology/approach - <IT>This paper offers a retrospective case study using Bruner's risk assessment framework to examine Berkshire Hathaway's 1998 Gen Re acquisition by CEO Warren Buffet, which proved to be a problematic deal. The case study makes use of recent post-deal reports.</IT> Findings - <IT>The case study supports the findings of Bruner's research regarding the utility of the M&A risk assessment framework presented in his book.</IT> Research limitations/implications - <IT>Tthe field of real disasters could be the subject to further strategy-based research.</IT> Practical implications - <IT>Bruner's disaster-based M&A risk assessment framework could be practically utilized in M&A.</IT> Originality/value - <IT>This paper is practically-oriented commentary on recently published M&A risk assessment research, which is analyzed via case study.</IT>

Keywords: Acquisitions and mergers; Disasters; Risk analysis

Document Type: Research article

DOI: http://dx.doi.org/10.1108/10878570810918322

Publication date: 2008-11-07

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