The Role of Management Accounting in Strategic Financial Decision-Making: A Case Study of M&A Transactions

Mergers and acquisitions may be cited as a strategic financial decision that involves a considerable amount of resources in terms of commitment and complexity in the analysis, which cannot be explained through the lens of financial reporting. In this research, the author has attempted to conduct an in-depth case study on the acquisition of KUKA AG by Midea Group in the amount of EUR 4.5 billion (2015–2024) to understand the management accounting tools in various strategic decision-making scenarios. The research has adopted a four-stage analytical methodology in the acquisition process: strategic planning, target evaluation, transaction execution, and post-acquisition integration. The value chain analysis and benchmarking tools were identified in the strategic planning phase. The discounted cash flow method assisted in the estimation of the intrinsic value of the target company (EUR 83.50 to 96.26 per share). The sensitivity analysis and scenario simulations of the DCF method assisted in the understanding of the price determination of the target company at EUR 115 by estimating optimistic, baseline, and pessimistic scenarios. The institutional regulations that require the operational independence of KUKA for a seven-year period also influenced the use of integration-oriented tools such as the balanced scorecard and unified budgeting systems. The research findings highlight the institutional factors as the boundary conditions for the use of management accounting tools. The above explains the reason why the transaction approval requirements limit the ability to integrate the target company. Cross-border acquisitions often encounter challenges when regulatory legitimacy conflicts with integration needs.