M&A in family business
Target scope, integration, and performance
The presenter is Giovanna Campopiano, Senior Lecturer at the Centre for Family Business, Lancaster University Management School, in the UK. The paper is entitled “M&A in family business: Target scope, integration, and performance”. Florian Bauer and Christian Kruckenhauser are co-authors of this paper.
date: January 13, 2021
time: 12:00-13:00 (CET)
location: Zoom (private event)
ABSTRACT – While family firm and M&A research investigate acquisitions as an important tool to reach strategic goals, they look at these operations from different angles. We suggest that both streams can inform each other and that integrating context, process, and outcome offers a more comprehensive picture that contributes to explaining so far inconclusive results on performance. We build on the behavioural agency model to understand how co-existing value systems in family firms, i.e. financial and socioemotional wealth, impact sequential but interrelated decisions along the acquisition process. Using 680 observations of acquisitions made by German family and non-family firms in the timespan 2007-2017, our findings suggest that high family involvement in ownership negatively affects the acquisition of a target with a narrow geographical scope, and family involvement in management even triggers this effect. Interestingly, a narrow geographic scope of the target is detrimental for performance, with an even worsening effect of structural integration. This suggests that disruptions might outweigh control possibilities depending on the choice of the target’s regional focus. Combined, our results indicate that co-existing value systems in FFs impact sequential but interrelated decisions in acquisitions.
Centre for Family Business
Lancaster University Management School