Abstract
Purpose This study aims to contribute with an extended framework on synergy realisation in acquisitions. The study conceptualises synergy realisation after acquisitions, in interaction with other companies in a business network and that synergy can be the result of both intended and not intended actions. Design/methodology/approach The study is based on a company involved in acquisitions, being both the acquirer and the acquired. The data for analysis were collected through semi-structured interviews with managers involved in the described acquisition processes. The semi-structured interviews were guided by overarching themes to cover relevant areas of the described acquisitions. Findings This study develops a framework in which synergy is used as a concept in business networks. The framework offers a more dynamic perspective on acquisition processes and extends the view of acquisition performance beyond more financial and company internal aspects of acquisition processes. Further, the findings show that related companies such as customers and suppliers, play important roles in synergy realisation. Practical implications From a managerial perspective, the study shows the importance of understanding the underlying forces of integration processes. Originality/value The concept of synergy used in this study not only includes the companies integrated in an acquisition but also their business networks. Including the integrated companies and their business networks provides a more dynamic perspective from which to plan and realise synergy.
Highlights
The present study aims to contribute with an extended framework on synergy realisation in acquisitions drawing on literature from mainly two fields: business strategy and business networks
5.2 Synergies from a business network perspective Leaving the internal company perspective, the analysis revealed other dimensions of the relationship amongst actors: synergy associated with sales is related to customers and synergy associated with purchasing is related to suppliers
The point of departure in the present study was to assert a need for knowledge and understanding of synergy from the perspective of business networks in a contextualised conceptualisation
Summary
Synergy is frequently used to legitimise acquisitions (Mukherjee et al, 2004; Seth et al, 2000; Trautwein, 1990; Porter, 1987) in various types of industries, for example, Mylan’s acquisition of Meda (Mylan, 2016) in the pharmaceutical industry, Pernod Ricard’s acquisition of Vin and Sprit (Pernod, 2008) in the food industry, AT&T’s acquisition of Time Warner (AT&T, 2016) in the communications industry and Volkswagen’s acquisition of Scania (Volkswagen, 2014) in the manufacturing industry. This study examined the changes at Alfa through the acquisitions between 1997 and 2005 and includes besides Alfa, the companies named Beta, Delta and Gamma. The case comprises three acquisitions: Alfa’s acquisition of Gamma in 1997, Alfa’s acquisition of Beta in 1999/2000 and Delta’s acquisition of Alfa in 2000, see the timeline in Figure 3 and includes the companies. The changes Alfa experienced can be characterised as follows: a horizontal acquisition of a manufacturer of the same size (Gamma), a concentric acquisition where Alfa acquired a company with a complementing product range (Beta) and a concentric acquisition where Alfa was acquired by Delta for the same reasons. Alfa was internationalised through acquisitions of distributors and producing companies and through the establishment of sales companies
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