M&A strategy of large companies in Europe: preliminary results from the Ceris database "100 top EU firms' Acquisition/Divestment database 1987-1993"
AbstractThe database ADD (Acquisition and Divestment Database) was established at Ceris in order to investigate the external growth of large EU firms. The selection of the companies included in the ADD was aimed at building an homogeneous database according to the Market Share Matrix (MSM) - a database generated within a EU project on the structure of European manufacturing industry. In principle, the consistency between the two databases makes it possible to use jointly information on diversification and internationalisation of EU firms (MSM) and on their external growth (ADD). For each company, we considered the deals directly or indirectly carried out by the holding company and by the affiliates controlled by a percentage exceeding 50%. The database consists of 3 sets of variables describing: i) the "target" of the deal, i.e. the company that has been acquired; ii) the acquiring firm; iii) the characteristics of the deal itself. Preliminary results from the ADD are the following: •the 3852 deals collected in the period 1987-1993 are composed of: acquisitions (55%), divestments (34%), joint-ventures (11%). According to the M&A goal we find controlling deals (55%), exchange of company's assets (22%), non-controlling deals (19%), others (4%). •each EU leader made 35 deals on average, of which 21 acquisitions, 13 divestments, 2 joint-ventures. •on the top of the list there are: Unilever (79 deals) as far as acquisitions are concerned; Hanson (64) as far as divestments are concerned; Siemens (23) as far as joint-ventures are concerned. •cross-border deals represents the 68% of the total, and are located in Europe (32%), in Usa and Japans (32%), in Eastern European countries (2%), in less developed countries (1%). •according to the country where the deal is managed, ADD shows that 26% of total EU deals come from UK, 20% from Germany, 18% from France, 17% from Italy. In comparison with the importance of EU production in each country, UK shows an over-valuation of M&As (because the UK production is only 17% of the EU total), whereas Germany has a high weight of production (37%) and a low percentage of M&As. •according to the industry within the deal is managed, the non-differentiated industries represent 25% of total deals (but only 17% of total EU production), R&D differentiated industries represent 41% of total deals (and 39% of total EU production), advertisement differentiated industries represent 13% of total deals (and 10% of total EU production), R&D-and-advertisement differentiated industries represent 21% of total deals (and 34% of total EU production).
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Bibliographic InfoPaper provided by Institute for Economic Research on Firms and Growth - Moncalieri (TO) in its series CERIS Working Paper with number 199718.
Length: 26 pages Keywords :
Date of creation: Dec 1997
Date of revision:
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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