International Acquisitions Research Articles

Understanding trends, patterns, and dynamics in global company acquisitions: a network perspective

Studying acquisitions offers invaluable insights into startup trends, aiding informed investment decisions for businesses. However, the scarcity of studies in this domain prompts our focus on shedding light in this area. Employing Crunchbase data, our study delves into the global network of company acquisitions using diverse network analysis techniques. Our findings unveil an acquisition network characterized by a primarily sparse structure comprising localized dense connections. We reveal a prevalent tendency among organizations to acquire companies within their own country and industry, as well as those within the same age bracket. Furthermore, we show that the country, region, city, and category of the companies can affect the formation of acquisition relationships between them. Our temporal analysis indicates a growth in the number of weakly connected components of the network over time, accompanied by a trend toward a sparser network. Through centrality metrics computation in the cross-city acquisition network, we identify New York, London, and San Francisco as pivotal and central hubs in the global economic landscape. Finally, we show that the United States, United Kingdom, and Germany are predominant countries in international acquisitions. The insights from our research assist policymakers in crafting better regulations to foster global economic growth, and aid businesses in deciding which startups to acquire and which markets to target for expansion.

A Typology on Business Model Integration

ABSTRACTCurrently, we are witnessing firms engaging in acquisitions to explore new business models. However, despite operating within similar industry sectors, integrating these business models can be challenging. Beyond the mere integration of operational aspects, this paper argues that business model integration should encompass two crucial dimensions: the integration of market architectural strategies and the assimilation of mindsets that drive market operations. The paper constructs a typology for business model integration, grounded in the integration of market architectural strategies, and mindsets and illustrates the types through international acquisition examples. The paper contributes to existing research by exploring integration within the context of business model acquisitions. The division into market architectural strategies and mindset advances past understanding of business models. The conceptualization of “value‐creation culture” extends the boundaries of past acquisition research and underscores the significance of mindsets associated with new business models.

The Quest for Corporate Control: Cross-Border Acquisitions and Foreign Takeovers in Italy, 2005–2015

This paper covers the trend of cross-border mergers and acquisitions (M&As) of corporate control in Italy. The expansion of international acquisitions in the last decades changed the corporate structure of industries and business organizations. The common understanding regards the suspicious transfer of control of companies to a foreign owner. However, the reasons seem ungrounded, and the evidence is conflicting. This paper aims to disentangle this view and offer a more objective assessment. The research uses a dataset comprised of 446 cross-border deals of foreign companies targeting Italian business enterprises over the period 2005–2015 and their performance over the period 2013–2022. The case of Italy is of interest because of the number of foreign acquisitions in the years that comprised the great financial crisis (2007–2008) and the sovereign debt crisis (2010–2011). Foreigners’ takeover of Italian companies followed multiple strategies and produced international synergies. The article concludes with implications and considerations for further research.

Rebranding after international acquisitions: challenges of legitimation in emerging and developed countries

PurposeThis study describes how a multinational enterprise (MNE) gains acceptance after rebranding acquired brands from different countries among its internal and external stakeholders and identifies factors that influence this process.Design/methodology/approachThe study employed a single case-study approach, including 18 semi-structured in-depth interviews with employees of a firm involved in the rebranding process in six countries. The countries are Sweden, Germany, the United States, Brazil, Colombia and Mexico.FindingsThe findings reveal how the MNE integrated brands it acquired in different international markets into one overarching corporate brand. The study shows that in emerging countries, external legitimation (external implementation process, country profiles and customer buy-in) constitutes the most significant challenge. By contrast, in developed countries, internal legitimation (employee buy-in and internal implementation process) is more challenging.Research limitations/implicationsThe study contributes to and extends the rebranding literature by using a legitimation lens to analyze the rebranding process. This lens shows how internal and external stakeholders are both crucial to successful rebranding. The study provides a comprehensive perspective of the process, identifies challenging factors and differentiates between their importance in emerging and developed countries.Originality/valueTo address the dearth of research on how firms legitimize a new brand in different national contexts, the study compares the rebranding process in multiple countries and discusses the factors influencing the rebranding process.

Host-country climate risk and the expansion of emerging market firms: a strategic tripod application

ABSTRACT Climate risk is a pressing global concern that affects multinational enterprises in manifold ways. Yet this has received less attention in international management literature. To address the gap, this study examines the impact of climate risk on the expansion and performance of emerging multinational enterprises (EMNEs) and tests the moderating effects of industry and institutional factors on the relationships. Using a dataset comprising the international acquisitions initiated by MNEs from emerging markets in 1998–2018, we find that host-country climate risk negatively affects the firms’ expansionary entries and is detrimental to firm performance. In addition, we find that firms from high-polluting industries are likely to show greater environmental awareness and increase their commitment to climate-risk countries. At the country level, our results show that home-host country political ties reduce the negative impact of climate risk on firms’ expansion and performance. The findings contribute to the literature on environmental management in an international business context and offer important practical implications for managers and government agencies.

A different view on acquisition paradox: Empirical examination of international acquisitions from competitiveness perspective

Acquisitions are complex strategic decisions and there is not a consensus about the outcomes of them. The complexity and the implications increase with international acquisitions (IA). We examine international acquisitions from a different perspective to see how they affect competitiveness of acquires using a sample of international acquisitions by U.S. firms applying a control sample methodology. Competitiveness outcomes of IAs vary based on the dimension used. They result with lower financial performance, profitability and productivity whereas have a positive effect on market power and innovation of acquirers. Negative performance is consistent with the general belief about agency theory, but our findings also provide support for the resource-based view of enhanced competitiveness. Regarding the success factors, we show that capabilities of acquirers matter more than their resources in explaining post-acquisition competitiveness of acquirers. Acquirers with greater acquisition experience benefit a lot more from IAs compared to firms without acquisition experience. We also show that relatedness of acquirer and target is crucial for creating synergies and efficiencies in terms of enhanced productivity.

Managing the retention of key employees in international acquisitions: a multiple case study

Managing the retention of key employees in international acquisitions: a multiple case study

Managing the retention of key employees in international acquisitions: a multiple case study

Managing the retention of key employees in international acquisitions: a multiple case study

Anta Sports International Acquisition Battle: From Nothing to Something and From Small to Big Metamorphosis

Under the impact of the three-year epidemic, China's total retail sales of consumer goods declined and consumers' propensity to consume continued to weaken, but sales in the sporting goods industry continued to grow steadily, with growth rates exceeding those of total retail sales of consumer goods. Chinese consumers are more resilient in their consumption of sporting goods, and after China's opening up, the proportion of Chinese people participating in outdoor sports has increased dramatically, creating greater demand in the market. In this context, the high-end outdoor sports brand beginning of the fire. However, in this the biggest winner is behind the Anta, a local Chinese brand acquired Finland's high-end sporting goods brand Amer Sports, and successfully turned a loss into profit. As matter of fact, such an opportunity Anta not only seized once, this paper focuses on the analysis of Anta's acquisition of FILA and Anta's acquisition of Amer Sports two classic cases, explored Anta through cross-border mergers and acquisitions to achieve the metamorphosis from scratch, from small to large, for other popular clothing brands to reshape the product grade, expand the share of the international market to provide experience and reference.

Family Firms’ Shareholder Structure and International Acquisitions: A Differentiated Socioemotional Wealth Approach

From a mixed gamble perspective, we contend that family firms (FFs) with different family shareholder structures are confronted with different trade-offs among current and prospective financial and socioemotional wealth (SEW), leading to differences in their international acquisition choices. We also explore the moderating role of family leadership and performance aspirations. Our findings show that FFs with a dominant family owner are more likely to pursue international acquisitions, especially when FFs are led by a family CEO or when they experience below-target performance, as in such cases, they prioritize prospective financial and SEW gains, thereby sacrificing current SEW and financial wealth.

Smoke signal: When firms' patent strategy and local patent protection system affect equity stakes in cross-border acquisitions

A distinctive feature of many international acquisitions of firms with technology resources is the extreme uncertainty about the value of the target's resources. Such uncertainty increases the complexity of ownership decisions in target firms. Drawing from signaling theory, we articulate how international acquirers perceive the pre-emptive power of target firms' patent portfolio as a positive signal, increasing their confidence in target firms' technology and leading them to seek a higher level of equity. We further argue that the strength of the target firm's home country's patent system also acts as a positive signal that encourages investors to acquire a higher level of equity in cross-border acquisitions. However, it also weakens then impact of the pre-emptive power signal. Our findings have implications for scholars, policymakers, and managers.

Measuring Value in Development with Advanced Real Options for International Sequential Acquisitions

Even though the application of real options theory in international business research has increased substantially, the measurement of collaborative synergies in international sequential acquisition by means of advanced real options is still the theoreticall gap which needs to be filled by new research and promising area for empirical research. This paper moves the field forward and highlights the fact that strategic synergies can be considered as compound real options for growth that are opened by an international sequential acquisition and, thus, add market value to the acquirer. Our research is presented as a theory-building inductive case-based study. This paper aims to integrate sequential compound real options with real options that have changing volatility in order to evaluate collaborative tacit synergies (a value in development) of sequential international acquisitions; thus, it contributes to corporate finance, international business, and strategic management theory with a fresh evaluation of the applications of advanced real options.

Information Institutions and Returns in International Acquisitions

Information Institutions and Returns in International Acquisitions

The role of networks in international acquisition premiums

Our work builds on network theory to investigate the role of alliance networks in international acquisition premiums. On the one hand, we postulate that an international acquirer’s network centrality in the target country lowers the inclination of offering higher bid premiums associated with its liability of foreignness (i.e., negatively moderates the relation between foreignness and premiums). On the other hand, we provide a perspective that a target firm’s local network centrality increases an international acquirer’s willingness to pay higher premiums in order to gain access to unique and valuable local knowledge and resources (i.e., positively moderates the relationship between foreignness and premiums). To test our hypotheses, we analyzed a sample of 1693 related acquisition bids made in more than 40 countries between 2008 and 2017. Our findings support our dual perspective on the role of networks and demonstrate that the acquirer's networks and the target's networks have distinct influences on the relationship between foreignness and bid premiums. This study makes contributions to the understanding of the complex dynamics at play in international M&As and emphasizes the importance of distinguishing between the acquirer’s and the target’s networks in shaping acquisition premiums.

M&A and technological expansion

AbstractWe examine how public firms listed in North American stock exchanges acquire technology companies during 2010–2020. Combining data from Standard and Poor's (S&P), Refinitiv, Compustat, and Center for Research in Security Prices, and utilizing a unique S&P taxonomy that classifies tech mergers and acquisitions (M&As) by tech categories and business verticals, we show that 13.1% of public firms engage in any tech M&A in the S&P data, while only 6.75% of public firms make any (tech or nontech) M&A in Refinitiv. In both data sets, the acquisitions are widespread across sectors of the economy, but tech acquirers in the S&P data are on average younger, more investment efficient, and more likely to engage in international acquisitions than general acquirers in Refinitiv. Within the S&P data, deals in each M&A‐active tech category tend to be led by acquirers from a specific sector; the majority of target companies in tech M&As fall outside the acquirer's core area of business; and firms are, in part, driven to acquire tech companies because they face increased competition in their core areas.

Experiential learning, institutional quality and Chinese state-owned firms’ cross-border acquisitions

PurposeState-owned firms play important roles in Chinese cross-border acquisition (CBA) activities. However, compared with private firms, state-owned firms have a lower likelihood of acquisition completion and take longer to complete a deal. This paper aims to determine why this phenomenon exists and how state-owned firms can overcome the constraints of their identity.Design/methodology/approachBy integrating organizational learning theory with institutional theory, this paper attempts to answer the research questions from a legitimacy perspective. Employing Chinese CBA data from 1982 to 2014, the authors use a logit model and a random effects model to test the hypothesis.FindingsThe results show that a state-owned identity easily causes legitimacy concerns among host country regulatory agencies; thus, it may result in longer and more uncertain evaluation behaviors, which lead to a lower likelihood of CBA completion and a longer deal duration. Only experience with failed acquisitions can increase CBA completion probability. Furthermore, in very complex decision-making environments, such as that surrounding deal duration, only specific types of experience (i.e. experience of failed international acquisitions) can trigger learning behavior, whereas general experience (i.e. failed acquisition experience) has little influence. Favorable bilateral relationships may not improve the completion rate and efficiency of state-owned firms, but high-quality host country institutions lead to a higher likelihood of CBA completion among state-owned firms; however, this may be not conducive to decreasing the time needed to complete an acquisition deal.Originality/valueFirst, by discussing the completion rate and duration of CBAs conducted by state-owned firms and analyzing the factors that influence them, this paper enriches and develops the theory of organizational overseas mergers and acquisitions (M&As). Second, by adopting a legitimacy perspective and integrating institutional theory, the authors theorize how state-owned status influences firms’ M&A completion rate and time and test the hypotheses empirically; thus, this paper improves and deepens institutional theory. Third, by discussing how different types of experience (i.e. successful experience vs failed acquisition experience) influence the acquisition completion rate and duration and how general experience and specific types of experience affect these two dependent variables differently, this paper explains how state-owned firms can learn effectively from experience, contributing to organizational learning theory.

Will investors’ excitement last? Determinants of investors’ responses to cross-border acquisitions by Chinese firms

Previous studies have found that in the short term, investors in emerging economies tend to react optimistically to cross-border acquisitions. However, studies in both financial economics and strategic management have acknowledged that there may be short-term abnormal returns in the stock market. As such, based on a behavioral perspective on investor valuation, we examine whether and when investors’ initial reactions are sustained using a sample of cross-border acquisitions by Chinese firms from 1998 to 2018. We find that the investor’s initial positive reactions are more likely to be sustained in the long term when (1) a cash payment is used for the acquisition, (2) the acquiring firm has more international acquisition experience, (3) the target firm’s country has a large economy, and (4) the target firm’s country has a culture of high uncertainty avoidance. Our findings extend the behavioral perspective on market reactions to cross-border acquisitions, and we contend that investors’ market valuations are a complex process that relies on various contextual cues. We contribute to an improved understanding of how investors evaluate a firm’s cross-border acquisitions over time.

Acquisition Relatedness in Family Firms: Do the Environment and the Institutional Context Matter?

AbstractResearch on the acquisition behaviour of family firms has produced conflicting theoretical arguments and mixed empirical findings on their propensity to acquire related or unrelated targets. While previous work has mainly focused on firm‐level variables, this study examines the environment in which family firms operate and the institutional context where acquisitions take place. Drawing on the mixed gambles logic of the behavioural agency model, we theorize that family firms are more likely than nonfamily firms to undertake related acquisitions when they operate in uncertain environments to avoid losses to the family's current socioemotional wealth. However, family firms are more likely to undertake unrelated acquisitions, when the environment is uncertain but the target operates in a similar and more developed institutional context where prospective financial gains are more predictable. Overall, building on a sample of 1014 international acquisitions, our study offers important contributions to the literature on family firms and acquisitions.

The case for robust academic research on corporate governance

Corporate Governance: An International ReviewVolume 31, Issue 3 p. 400-404 EDITORIAL The case for robust academic research on corporate governance Konstantinos Stathopoulos, Corresponding Author Konstantinos Stathopoulos [email protected] The University of Manchester, Manchester, UK Correspondence Konstantinos Stathopoulos, The University of Manchester, Booth Street West, Manchester M15 6PB, UK. Email: [email protected]Search for more papers by this authorTill Talaulicar, Till Talaulicar University of Erfurt, Erfurt, GermanySearch for more papers by this author Konstantinos Stathopoulos, Corresponding Author Konstantinos Stathopoulos [email protected] The University of Manchester, Manchester, UK Correspondence Konstantinos Stathopoulos, The University of Manchester, Booth Street West, Manchester M15 6PB, UK. Email: [email protected]Search for more papers by this authorTill Talaulicar, Till Talaulicar University of Erfurt, Erfurt, GermanySearch for more papers by this author First published: 07 May 2023 https://doi.org/10.1111/corg.12531Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL REFERENCES Bhagat, S., & Hubbard, G. (2022). Rule of law and purpose of the corporation. Corporate Governance: An International Review, 30(1), 10– 26. https://doi.org/10.1111/corg.12374 Castañer, X., Goranova, M., Hermes, N., Kavadis, N., & Zattoni, A. (2022). Ownership and corporate governance across institutional contexts. Corporate Governance: An International Review, 30(6), 638– 655. https://doi.org/10.1111/corg.12491 Chen, V. Z., Hobdari, B., Kellermanns, F., & Sluhan, A. (2022). For love or money? Family versus financial blockholders in international acquisitions. Corporate Governance: An International Review, 30(2), 140– 160. https://doi.org/10.1111/corg.12392 Chen, X., Torsin, W., & Tsang, A. (2022). International differences in the CEO gender pay gap. Corporate Governance: An International Review, 30(5), 516– 541. https://doi.org/10.1111/corg.12421 Hudson, K., & Morgan, R. (2022). Ideological homophily in board composition and interlock networks: Do liberal directors inhibit viewpoint diversity? Corporate Governance: An International Review, 30(3), 272– 289. https://doi.org/10.1111/corg.12406 Ponomareva, Y., Federo, R., Aguilera, R., & Collin, S.-O. (2022). The cost of conformity to good governance: Board design and compensation. Corporate Governance: An International Review, 30(4), 399– 420. https://doi.org/10.1111/corg.12408 Volume31, Issue3May 2023Pages 400-404 ReferencesRelatedInformation

The establishment mode of Chinese MNEs abroad and the Belt and Road Initiative: insights from a strategy tripod perspective

PurposeEmerging-market multinational enterprises (MNEs) have pushed institutional factors to the cutting-edge of international business research. As for Chinese MNEs, the importance of institutions has been strengthened since the Chinese government launched the Belt and Road Initiative (BRI), which seeks to promote a comprehensive platform for cooperation among countries. This study aims to investigate the role played by the BRI as an institutional factor moderating the influence of other institution-, industry- and firm-specific factors on establishment mode choice by Chinese MNEs.Design/methodology/approachDrawing on the strategy tripod, a perspective claiming that a firm's strategies are the result of internal, industrial and institutional conditions, this study develops a number of hypotheses that are tested with data on 1,076 outward foreign direct investments (OFDIs) of Chinese MNEs between 2013 and 2021.FindingsThe results show that the BRI moderates the influence of both the firm's prior international acquisition experience and Chinese government's OFDI restrictions on the establishment by means of an acquisition. They also report that this moderating effect does not apply for acquisition experience in the host country nor institutional distance.Originality/valueThis study contributes to reinforce the importance of institutions as the third leg of a strategy tripod when explaining international behavior of Chinese MNEs. It also suggests that the BRI is a diplomatic tool that may act as a substitute for the firm's resources and may mitigate the negative influence of other external factors.