Does merger & acquisition (M&A) strategy matter? A contingency perspective

Duncan N. Angwin, Uma Urs, Naaguesh Appadu, Ioannis C. Thanos, Stavros Vourloumis and Minas N. Kastanakis

European Management Journal, 2022, vol. 40, issue 6, 847-856

Abstract: This paper takes a contingency approach to investigate whether there are market performance variations for different types of M&A. Eight different types of M&A are identified in a typology based upon the conjunction of three contextual dimensions: external environmental, acquiring firm level strategy and CEO motivation. Drawing upon a sample of 1,926 domestic UK deals we evaluate the typology to determine whether the financial markets distinguish between different types of M&A. Results indicate significant market and risk-adjusted performance differences by M&A type. These confirm that a contingency approach to M&A performance has merit. We suggest that the proposed integrated typology, that recognizes the importance of multiple aspects of strategic fit to M&A performance, addresses the paradox that M&A practitioners continue to pursue deals despite widespread acceptance that they result in high failure rates.

Keywords: M&As; M&A strategy; Contingency perspective; Acquiring firm level strategy; CEO motivation; Typology (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eurman:v:40:y:2022:i:6:p:847-856

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DOI: 10.1016/j.emj.2022.09.004

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