Mergers and acquisitions in the construction industry : an exploratory study
Mergers and Acquisitions (M&A) are major strategic initiatives undertaken by many organisations. Within the construction context, these have been used, amongst others, to accelerate growth, reduce the effects of the construction cycle, enter into new markets, and spread risk. During the last decade, M&A were recognised as the preferred vehicle for expansion into the global construction market. Major European and international construction organisations use mergers or acquisitions to increase their geographical coverage and business portfolio. Mergers and Acquisitions impact on a number of organisational dimensions ranging from `soft' issues such as organisational culture to `hard' issues such as IT integration. Four specific aspects of mergers and acquisitions are investigated within this thesis. These are as follows: Strategy, Business Portfolio and Performance Measurement of construction organisations and the impact of M&A on subsequent performance; the Acquisition Strategy adopted for entering emerging markets such as Central and Eastern Europe; the Impact of Mergers and Acquisitions on construction companies' Information Systems and Information Technology (IS/IT); and an Investigation of Knowledge Management Strategies for organisations that have undergone mergers and acquisitions. The thesis adopts a qualitative research methodology. An extensive literature review was conducted on mergers and acquisitions with particular emphasis on its use within the construction sector. The literature review provided a sound basis for theory development and identified areas in which further understanding was requiired. A multiple case study approach was selected for each of the four aspects studied and the data was obtained using semi-structured interviews. Based on the case study data, analysis and discussion were conducted resulting in conclusions for each of the four aspects investigated. The research concluded that Mergers and Acquisitions were an important vehicle for construction organisations to achieve growth, and expand geographically into new markets and new sectors. However,. the implications of mergers and acquisitions need to be understood and the processes . before, during and after the merger or acquisition is finalised need to be carefully planned and communicated to the relevant parties. Mergers and Acquisitions'- can offer' tremendous advantage to an organisation and several recommendations are made regarditig how the process may be improved within the construction context.