Merger motives and merger prescriptions

Article Abstract:

An overview of explanations of merger activity is presented to relate the explanations to prescriptions for strategies in mergers. Findings suggested by the overview indicate that theories of merger motives can be put into seven groups, and theories based on managerial empire building, private information, and process influences are better supported by evidence as compared to other theories. Findings also suggest that mergers typically are discussed in terms of the type of acquisition mode, including entry mode, acquisition mode, and integration mode. The modes provide an efficient way to communicate a merger's position. Additionally, findings suggest that research into motives for mergers should de-emphasize the efficiency theory and should focus on explanations that emphasize conflicting goals, ambiguous private data, and decision processes.

Mergers, acquisitions and divestments, Organizational research, Strategic planning (Business)

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Takeovers in the '60s and the '80s: evidence and implications

Article Abstract:

An examination of the two major waves of takeover activity that took place in the 1960s and the 1980s reveals that the shift to increased specialization that occurred during the takeover wave of the 1980s essentially reversed the trend toward unrelated diversification of companies that began with the 1960s wave. The implications of this 30-year pattern that has seen US corporations move from unrelated diversification only to return to increased specialization is discussed with regards to antitrust policy, capital market efficiency, agency theory and corporate strategy. A key conclusian derived is that governmental antitrust policy played an important, if largely unintentional, part in shaping the nature of the takeover waves of the 1960s and the 1980s.

Economic aspects, Antitrust law

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Research note and communication mergers that last: A predictable pattern?

Article Abstract:

The ownership of 434 large acquisitions made by publicly traded U.S. firms between 1967 and 1969 were studied to examine the nature of mergers that last. Unrelated acquisitions are considered for longevity also. Results showed that the majority of mergers completed in the late 1960s was still firm in 1982. A bit higher proportion of unrelated acquisitions was compared to related acquisitions, but the difference is not statistically significant.

Property acquisition

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