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Does merger & acquisition (M&A) strategy matter? A contingency perspective

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  • Angwin, Duncan N.
  • Urs, Uma
  • Appadu, Naaguesh
  • Thanos, Ioannis C.
  • Vourloumis, Stavros
  • Kastanakis, Minas N.

Abstract

This paper takes a contingency approach to investigate whether there are market performance variations for different types of M&A. Eight different types of M&A are identified in a typology based upon the conjunction of three contextual dimensions: external environmental, acquiring firm level strategy and CEO motivation. Drawing upon a sample of 1,926 domestic UK deals we evaluate the typology to determine whether the financial markets distinguish between different types of M&A. Results indicate significant market and risk-adjusted performance differences by M&A type. These confirm that a contingency approach to M&A performance has merit. We suggest that the proposed integrated typology, that recognizes the importance of multiple aspects of strategic fit to M&A performance, addresses the paradox that M&A practitioners continue to pursue deals despite widespread acceptance that they result in high failure rates.

Suggested Citation

  • Angwin, Duncan N. & Urs, Uma & Appadu, Naaguesh & Thanos, Ioannis C. & Vourloumis, Stavros & Kastanakis, Minas N., 2022. "Does merger & acquisition (M&A) strategy matter? A contingency perspective," European Management Journal, Elsevier, vol. 40(6), pages 847-856.
    • Handle: RePEc:eee:eurman:v:40:y:2022:i:6:p:847-856
    DOI: 10.1016/j.emj.2022.09.004
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