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Mergers and Acquisitions in the Media Industries: Were Failures Really Unforeseeable?


  • Stephanie Peltier


Over the last 2 decades, mergers and acquisitions (M&A) have become the most preferred strategic tool of firms in the media industry. As still claimed by analysts and managers, M&A deals are expected to generate greater economic efficiency, especially through size effects (economies of scale and scope and other synergies). However, it seems that the hopes placed in these synergies are generally disappointed. Indeed, among a sample of 11 media firms for fiscal years 1998 and 1999, it appears a firm's size and a simultaneous presence in many businesses of the media industries do not improve economic performance, nor does the possession of complementary assets. The existence of economies of scale and scope, or at least the ability of firms to implement them, has still to be proved. Inversely, the internationalization rate of firms, especially for non-U.S. firms, and their level of focus on the media industries both appear to improve economic performance. These results, based on data available when AOL Time Warner and Vivendi Universal M&A deals took place, raise the issue of the economic rationality of such mergers.

Suggested Citation

  • Stephanie Peltier, 2004. "Mergers and Acquisitions in the Media Industries: Were Failures Really Unforeseeable?," Journal of Media Economics, Taylor & Francis Journals, vol. 17(4), pages 261-278.
  • Handle: RePEc:taf:jmedec:v:17:y:2004:i:4:p:261-278
    DOI: 10.1207/s15327736me1704_2

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    Cited by:

    1. Gonçalves, Vânia & Evens, Tom & Alves, Artur Pimenta & Ballon, Pieter, 2014. "Power and control strategies in online video services," 25th European Regional ITS Conference, Brussels 2014 101438, International Telecommunications Society (ITS).
    2. Ghosal Vivek, 2011. "The Law and Economics of Enhancing Cartel Enforcement: Using Information From Non-Cartel Investigations to Prosecute Cartels," Review of Law & Economics, De Gruyter, vol. 7(2), pages 501-538, December.
    3. Yanga, Shuying & Kim, Seongcheol, 2017. "Do Cross-border M&As by Chinese Media and Entertainment Firms Create Value? Evidence from US-targeted and Korea-targeted Deals," 14th ITS Asia-Pacific Regional Conference, Kyoto 2017: Mapping ICT into Transformation for the Next Information Society 168549, International Telecommunications Society (ITS).
    4. Hans van Kranenburg & Gerrit Willem Ziggers, 2013. "Dynamic competition and ambidexterity," Chapters,in: Handbook on the Digital Creative Economy, chapter 6, pages 57-66 Edward Elgar Publishing.

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