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Deploying the M&A Counterattack

Sometimes it pays for a company to respond to a deal in its own backyard, and sometimes it doesn’t.

Authors: Thomas Keil (University of Zurich), Tomi Laamanen (University of St. Gallen), and Rita G. McGrath (Columbia Business School)

Publisher: Long Range Planning, vol. 46, no. 3

Date Published: June 2013

Few corporate moves have as much potential to shake up an industry as mergers and acquisitions. But although the post-deal performance of acquiring firms has been widely studied, little attention has been paid to the peripheral effects of M&A deals on other companies in the same industry. This study examines how the acquisition of rivals by an existing competitor or new player affects the performance of third-party firms, and how those firms could best strike back. As the authors found out, sometimes it makes sense to sit tight and do nothing at all.

Software firms such as Microsoft, Oracle, SAP, and Symantec have long made headlines for the aggressive acquisition strategies they use to expand and defend their turf. As the San Francisco Business Times put it in 2010, “Scarcely a month, or sometimes even a week, goes by without a press announcement from Oracle that it has bought another business.”   To read the entire article at strategy + business, click here.

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