Impact of Related Acquisition Strategy on Bidding Company Performance

KORICAN, MIRNA and BARAC, ZORAN and JELAVIC, IVIJA (2014) Impact of Related Acquisition Strategy on Bidding Company Performance. Journal of Economic and Social Studies, 4 (2). ISSN 1986 – 8502; doi: 10.14706/JECOSS11422

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Abstract

: Strategy researchers believe that the better the strategic fit or relatedness between the bidding and acquired firms, the greater should be the economic gain from the merger. Although merger performance has been widely researched we recognized that empirical results on merger performance are inconclusive and that there are research gaps related to geographical settings, time frame and methodological approach. Thus, the research question examined in our study was to find out if acquisition strategy or relatedness of merging companies increases performance of the bidding company. Also we considered moderating effect of premerger bidder profitability on the performance of the merger. Our study predicts that relatedness between merging companies has a positive impact on the merger’s performance. Results of 49 mergers completed in 2008 in EU member countries and Switzerland show that related mergers have better merger scores than unrelated mergers. We also predict that the impact of the related acquisition strategy becomes more positive as bidder premerger performance decreases.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Journal of Economic and Social Studies
Depositing User: Mrs. Emina Mekic
Date Deposited: 29 May 2014 13:09
Last Modified: 02 Sep 2014 07:50
URI: http://eprints.ibu.edu.ba/id/eprint/2405

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