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Determinants of International Acquisition Success:: Lessons from FirstGroup in North America

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  • Duncan, Catriona
  • Mtar, Monia

Abstract

This paper proposes a process model of key determinants of international acquisitions success, drawing on strategic management, organisational and learning theories. The validity of this model is tested through the analysis of the successful acquisition by FirstGroup, the UK's largest provider of public transport, of Ryder, the second largest player in the US School Bus industry. The case demonstrates the importance of identifying a target in a market sector in which the UK has a competitive advantage and which fits well with the acquirer's core business. Going against the grain of theory on integration, findings also show that, under certain conditions, low integration can yield significant benefits, leaving further integration as an option for the future, to create further value. The impact of cultural fit on acquisition performance is found to be dependent upon the level of integration adopted. The capacity of the acquirer to learn from previous acquisition experience is critical in ensuring the successful management of both pre- and post-acquisition phases. The theoretical and practical implications of the findings are discussed.

Suggested Citation

  • Duncan, Catriona & Mtar, Monia, 2006. "Determinants of International Acquisition Success:: Lessons from FirstGroup in North America," European Management Journal, Elsevier, vol. 24(6), pages 396-410, December.
    • Handle: RePEc:eee:eurman:v:24:y:2006:i:6:p:396-410
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    Citations

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    Cited by:

    1. Teerikangas, Satu & Thanos, Ioannis C., 2018. "Looking into the ‘black box’ – unlocking the effect of integration on acquisition performance," European Management Journal, Elsevier, vol. 36(3), pages 366-380.
    2. Wang, Daojuan & Hain, Daniel S. & Larimo, Jorma & Dao, Li T., 2020. "Cultural differences and synergy realization in cross-border acquisitions," International Business Review, Elsevier, vol. 29(3).
    3. Ahammad, Mohammad Faisal & Glaister, Keith W., 2013. "The pre-acquisition evaluation of target firms and cross border acquisition performance," International Business Review, Elsevier, vol. 22(5), pages 894-904.
    4. Reddy, Kotapati Srinivasa, 2015. "The State of Case Study Research in Mergers & Acquisitions: A Review of the Literature in Different Management Streams," MPRA Paper 63939, University Library of Munich, Germany, revised 2015.
    5. Timmers, A.D., 2010. "The perceived cultural changes and the changes in identification of the employees during a merger between two airlines," Other publications TiSEM a71f79cd-facf-445a-a0ba-4, Tilburg University, School of Economics and Management.
    6. Nurhazrina Mat Rahim & Ruhani Hj. Ali, 2018. "The Role of Country-Level Differences in Influencing ASEAN Firms’ Cross-Border Mergers and Acquisitions (CBMAs) Success," Capital Markets Review, Malaysian Finance Association, vol. 26(1), pages 36-55.
    7. Reddy, Kotapati Srinivasa, 2015. "Why do Cross-border Merger/Acquisition Deals become Delayed, or Unsuccessful? – A Cross-Case Analysis in the Dynamic Industries," MPRA Paper 63940, University Library of Munich, Germany, revised 2015.

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