To integrate or not to Integrate? Complementarity, similarity and acquisition value creation

Akbar Zaheer, Xavier Castañer () and David Souder
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Xavier Castañer: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

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Abstract: In this paper, the authors explain that relatedness is often associated with acquisition value creation without distinguishing between three underlying sources of synergy: business similarity, product complementarity and geographic complementarity. The authors argue that realizing value in acquisitions requires maching the type of relatedness with the appropriate degree of integration; specifically high integration for business similarity, medium integration for product complementarity and low integration for geographic complementarity. Empirical validation, broadly supporting their hypotheses comes from 88 M&As.

Keywords: mergers and acquisitions; value creation; integration (search for similar items in EconPapers)
Date: 2005
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Published in 2005

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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00587209

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