Master thesis in Business Administration and Business Law
Title:How to grow internationally: Merge or ally?
Author:Björn Fuisting
Tutors:Rikard Larsson and Catrin Karlsson
Purpose: The aim of this thesis it to compare different international growth strategies, mergers and acquisitions (M&As) versus strategic alliances, especially in relation to the amount of realised synergy. A secondary aim is to show the legal aspects of growth, in particular how cases considered under the EU merger regulation have been handled.
Method: This paper analyses 2 M&As and 3 alliances between auto manufacturers operating on the European market. The main focus is on synergy realisation as well as the legal aspects under EU law. Using the case survey method the paper was able to arrive at comparable numerical figures.
Conclusion: It is shown that both M&As and alliances on average realise almost the same amount of synergy, but the individual cases show large variations. None live up to the full potential synergy. Consistent treatment of the partnership is important as is trust in order to gain synergy realisation. To achieve synergies you need to be willing to share and integrate. If this is done in a planned manner, identifying best practise, the partnership is more successful, whether it is a M&A or an alliance.
The legal definition can differ from the business definition. The EU merger regulation looks for change of control (concentration) or co-operation and if the partnership becomes dominant. The procedure and rules vary whether it is a concentration or a co-operation agreement. Concentrations are dealt with more swiftly and receive individual decision whilst co-operational agreements can take longer to receive a decision or can aim to be covered by a block exemption. It is in the com...
