Motives, trends and effects in cross-border acquisitions in the finish technical engineering industry

Abstract

This study focuses on the technical engineering and consulting business which is a significant sub-sector of technology-related knowledge-intensive business services. The objective of the study is to explore the cross-border acquisitions - purchases and sales - of Finnish engineering consulting firms during the past decade 1997- 2006 in terms of the amount of transactions and the geographical distribution of acquiring and target nations. The motives and intended effects of acquisitions were also studied and compared to literature reviews and general industry characteristics. For most parts, the results are in line with the literature reviews, showing that product and market extensions are the most significant motives for cross- border acquisitions. Instead, knowledge acquisition especially for promoting innovation and R&D capabilities is not so apparent in the motives. Moreover, the geographical distribution in the Finnish sample does not yet clearly indicate a global movement of the industry towards the east, e.g. Asia. However, the strategies for market extensions of these knowledge-intensive firms in many cases seem to be implemented by other types of organizational changes than cross-border acquisitions. The results of the study also provide several possibilities for in-depth further studies of the motives and effects of acquisitions and future comparative studies of other geographical areas.