Thirty Years of Mergers and Acquisitions Research: Recent Advances and Future Opportunities
| DOI | http://doi.org/10.1111/j.1467-8551.2006.00475.x |
| Date | 01 March 2006 |
| Author | Richard Schoenberg,Susan Cartwright |
| Published date | 01 March 2006 |
Thirty Years of Mergers and Acquisitions
Research: Recent Advances and Future
Opportunities
Susan Cartwright and Richard Schoenberg
*
Manchester Business School, The University of Manchester, Booth Street West, Manchester M15 6PB
and
*
Cranfield University School of Management, Cranfield, Bedford, MK43 0AL, UK
Email: susan.cartwright@manchester.ac.uk [Cartwright]; richard.schoenberg@cranfield.ac.uk [Schoenberg]
The complex phenomenon that mergers and acquisitions (M&As) represent has
attracted substantial interest from a variety of management disciplines over the past
30 years. Three primary streams of enquiry can be identified within the strategic and
behavioural literature, which focus on the issues of strategic fit, organizational fit and
the acquisition process itself. The recent achievements within each of these research
streams are briefly reviewed. However, in parallel to these research advances, the
failure rates of mergers and acquisitions have remained consistently high. Possible
reasons for this dichotomy are discussed, which in turn highlight the significant
opportunities that remain for future M&A research.
Introduction
Mergers and acquisitions
1
continue to be a highly
popular form of corporate development. In 2004,
30,000 acquisitions were completed globally, equiva-
lent to one transaction every 18 minutes. The total
value of these acquisitions was $1,900 billion,
exceeding the GDP of several large countries.
However, in a paradox to their popularity,
acquisitions appear to provide at best a mixed
performance to the broad range of stakeholders
involved. While target-firm shareholders gener-
ally enjoy positive short-term returns, investors in
bidding firms frequently experience share price
underperformance in the months following ac-
quisition, with negligible overall wealth gains for
portfolio holders (Agrawal and Jaffe, 2000).
Internally managers of acquiring firms report
that only 56% of their acquisitions can be con-
sidered successful against the original objectives
set for them (Schoenberg, in press). Meanwhile,
target-firm executives experience considerable
acculturative stress and, on average, almost
70% depart in the five years following comple-
tion (Krug and Aguilera, 2005).
The complex phenomenon that mergers and
acquisitions represent has attracted the interest
and research attention of a broad range of
management disciplines encompassing the finan-
cial, strategic, behavioural, operational and
cross-cultural aspects of this challenging and
high risk activity. While in recent years research
into the human and psychological aspects of
M&A have increased in prominence, the M&A
literature continues to be dominated by financial
and market studies, with a high concentration of
interest in the USA and UK (Cartwright, 2005).
Our initial aim in compiling this Special Issue
was to reflect the multidisciplinary nature of
M&A, consistent with the scope of the British
Journal of Management, and to bring together a
collection of high-quality papers that captured a
range of different perspectives and modes of
inquiry. As we discuss below, M&A research has
tended to develop along discipline-based lines
and this has brought detailed insights into a
number of important aspects. However, it is
1
The terms merger and acquisition are used interchange-
ably in this article.
British Journal of Management, Vol. 17, S1–S5 (2006)
DOI: 10.1111/j.1467-8551.2006.00475.x
r2006 British Academy of Management
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