IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v36y2011i4p466-479.html
   My bibliography  Save this article

Mergers and acquisitions in the global food processing industry in 1986-2006

Author

Listed:
  • Muehlfeld, Katrin
  • Weitzel, Utz
  • van Witteloostuijn, Arjen

Abstract

Food systems around the world experienced increased merger and acquisition (M&A) activity over the past decades. Based on a sample of 13,911M&A attempts worldwide during 1986-2006, this study provides an analysis of major determinants of M&A completion in the food processing industry. Friendly attitude, cash payment and experience with M&As emerge as strong deal facilitators. Bidding competition, pursuit of parallel transactions, target subsidiary status and acquirer public status are the most important deal breakers. Unlike the lenient antitrust approach of the Reagan administration, the 1998 UK Competition Act and various directives and regulations on food safety and quality associated with the completion of the internal European market in 1992 facilitated M&A completion. In contrast, the beginning of the Economic and Monetary Union, as marked by the introduction of the Euro in 1999, had a strong negative effect on completion likelihood. This study identifies substantial regional differences. Completion of M&As that involve Asian firms depends on distinct factors. Results for NAFTA are mostly in line with predictions derived from general economic theory, compared to other regions.

Suggested Citation

  • Muehlfeld, Katrin & Weitzel, Utz & van Witteloostuijn, Arjen, 2011. "Mergers and acquisitions in the global food processing industry in 1986-2006," Food Policy, Elsevier, vol. 36(4), pages 466-479, August.
  • Handle: RePEc:eee:jfpoli:v:36:y:2011:i:4:p:466-479
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919211000662
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Moerland, Pieter W., 1995. "Alternative disciplinary mechanisms in different corporate systems," Journal of Economic Behavior & Organization, Elsevier, vol. 26(1), pages 17-34, January.
    2. Robert L. Conn & Andy Cosh & Paul M. Guest & Alan Hughes, 2005. "The Impact on UK Acquirers of Domestic, Cross-border, Public and Private Acquisitions," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(5-6), pages 815-870.
    3. Pickering, J F, 1983. "The Causes and Consequences of Abandoned Mergers," Journal of Industrial Economics, Wiley Blackwell, vol. 31(3), pages 267-281, March.
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    5. Adams, Wendi L. & Love, H. Alan & Capps, Oral, Jr., 1997. "Structural Analysis Of Mergers And Acquisitions In The Food Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(2), July.
    6. Bittlingmayer, George & Hazlett, Thomas W., 2000. "DOS Kapital: Has antitrust action against Microsoft created value in the computer industry?," Journal of Financial Economics, Elsevier, vol. 55(3), pages 329-359, March.
    7. Jorde, Thomas M & Teece, David J, 1990. "Innovation and Cooperation: Implications for Competition and Antitrust," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 75-96, Summer.
    8. Weber, Elke U. & Hsee, Christopher K. & Sokolowska, Joanna, 1998. "What Folklore Tells Us about Risk and Risk Taking: Cross-Cultural Comparisons of American, German, and Chinese Proverbs, , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(2), pages 170-186, August.
    9. Kwok Leung & Rabi S Bhagat & Nancy R Buchan & Miriam Erez & Cristina B Gibson, 2005. "Culture and international business: recent advances and their implications for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(4), pages 357-378, July.
    10. Mulherin, J. Harold & Boone, Audra L., 2000. "Comparing acquisitions and divestitures," Journal of Corporate Finance, Elsevier, vol. 6(2), pages 117-139, July.
    11. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    12. Loader, Rupert & Hobbs, Jill E., 1999. "Strategic responses to food safety legislation," Food Policy, Elsevier, vol. 24(6), pages 685-706, December.
    13. C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September.
    14. Viaene, Jacques & Gellynck, Xavier, 1995. "Structure, Conduct and Performance of the European Food Sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 22(3), pages 282-295.
    15. Yuanzhi Luo, 2005. "Do Insiders Learn from Outsiders? Evidence from Mergers and Acquisitions," Journal of Finance, American Finance Association, vol. 60(4), pages 1951-1982, August.
    16. Gregor Andrade & Mark Mitchell & Erik Stafford, 2001. "New Evidence and Perspectives on Mergers," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 103-120, Spring.
    17. Moeller, Sara B. & Schlingemann, Frederik P. & Stulz, Rene M., 2004. "Firm size and the gains from acquisitions," Journal of Financial Economics, Elsevier, vol. 73(2), pages 201-228, August.
    18. Mergenthaler, Marcus & Weinberger, Katinka & Qaim, Matin, 2009. "The food system transformation in developing countries: A disaggregate demand analysis for fruits and vegetables in Vietnam," Food Policy, Elsevier, vol. 34(5), pages 426-436, October.
    19. Adesoji Adelaja & Rodolfo Nayga & Zafar Farooq, 1999. "Predicting mergers and acquisitions in the food industry," Agribusiness, John Wiley & Sons, Ltd., vol. 15(1), pages 1-23.
    20. Connor, John M. & Geithman, Frederick E., 1988. "Mergers in the Food Industries: Trends, Motives and Policies," Choices, Agricultural and Applied Economics Association, vol. 3(2).
    21. Ken C. Yook, 2003. "Larger Return to Cash Acquisitions: Signaling Effect or Leverage Effect?," The Journal of Business, University of Chicago Press, vol. 76(3), pages 477-498, July.
    22. Elke U. Weber & Christopher Hsee, 1998. "Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk," Management Science, INFORMS, vol. 44(9), pages 1205-1217, September.
    23. Shleifer, Andrei & Vishny, Robert W, 1988. "Value Maximization and the Acquisition Process," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 7-20, Winter.
    24. Froot, Kenneth A., 1989. "Consistent Covariance Matrix Estimation with Cross-Sectional Dependence and Heteroskedasticity in Financial Data," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 24(03), pages 333-355, September.
    25. Wong, Pauline & O'Sullivan, Noel, 2001. " The Determinants and Consequences of Abandoned Takeovers," Journal of Economic Surveys, Wiley Blackwell, vol. 15(2), pages 145-186, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:jfpoli:v:69:y:2017:i:c:p:110-122 is not listed on IDEAS
    2. Chia Sun, 2014. "A conceptual framework for R&D strategic alliance assessment for Taiwan’s biotechnology industry," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 259-279, January.
    3. Xie, En & Reddy, K.S. & Liang, Jie, 2017. "Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 52(2), pages 127-183.
    4. Jin, Shaosheng & Guo, Haiyue & Delgado, Michael S. & Wang, H. Holly, 2017. "Benefit or damage? The productivity effects of FDI in the Chinese food industry," Food Policy, Elsevier, vol. 68(C), pages 1-9.
    5. Miltenburg, John, 2015. "Changing a multidomestic production network to a global function network: North America Heinz ketchup from 1960 to 2015," International Journal of Production Economics, Elsevier, vol. 168(C), pages 267-278.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:36:y:2011:i:4:p:466-479. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.