Authors: Christina Öberg; Johan Holtstrom
Mapping the number of completed mergers and acquisitions (M& As) over the past few decades wouldproduce a line roughly following the fluctuations of the business cycle. The most recent peak wasmarked by the numerous M& As occurring in the late 1990s and in early 2000 (Bengtsson and Skärvad2001 Weston and Weaver 2001), followed by the recession starting in late 2000 (Sevenius 2003 Lundell 2002 KPMG Corporate Finance 2003 Förvärv & fusioner 2004). Weston and Weaver (2001)describe this development as M& A waves, and refer to the most recent peak of mergers andacquisitions as the fifth M& A wave. Different peaks in the history of M& A have had different foci. In the1960s and 1970s, diversification and the creation of conglomerates were common reasons formerging with or acquiring other companies (Shleifer & Vishny, in Rumelt, Schendel and Teece 1994 Weston and Weaver 2001). In the age of economic globalisation, the M& As of the late 1990s andearly 2000 were more international in scope, involving companies from more than one country theywere also more focused on bringing intra-industry companies together (Bengtsson and Skärvad 2001 Sevenius 2003). The intra-industry focus on M& As could stand as a description for the concentrationin e.g. the automotive industry and the IT-sector in the late 1990s. But is this all we see?This paper focuses on M& As as a driving force for other M& As. More specifically, our focus is on howM& As among customers lead to M& As among suppliers, and reverse, in a network perspective. Welaunch the concept of parallel M& As to describe this phenomenon. The purpose of this paper is todiscuss parallel M& As, asking: In what ways are M& As among customers and suppliers a driving forcefor M& As? In contrast to the argument in e.g. Halinen, Salmi and Havila (1999) and Havila and Salmi(2000), we argue that M& As are not only a trigger to change, but also a response to change, andfurther, that these changes need not be directly dyadically connected (cf. Hertz 1998 Havila andSalmi 2000), but appear parallel to each other. Contrary to the motives presented in most traditionalM& A literature, this further means challenging M& As as only being the result of strategies within theacquiring company. Instead we point at M& As as contextually driven. Built on the six case studies,matching, dependence and keeping a “power balance” between customers and suppliers are referredto as key explanations for parallel M& As.
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Publish Year: 2005
Conference: Rotterdam, Netherlands (2005)