Acquisitions in Developed Markets: Challenges for Emerging Market Multinationals
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
This paper departs from the observation that emerging market multinationals (EM MNCs) rapidly conquer global markets, at the same time as our knowledge about the operations of MNCs in general is almost exclusively derived from mature, well-established markets. In particular this is true when it comes to post acquisition processes, which arguably reflects a passed pattern, where firms in emerging markets rather were targets for acquirers. The objective of this paper is therefore to describe how EM MNCs integrate and control their acquisitions in order to sustain and advance their international competitiveness. Since the main interest in this endeavor resides in the processes of integration and control, the empirical evidence consists of a careful study of one case: Bharat Forge Limited, an Indian MNC that over the two last decades has grown into a global player in its field, mostly through acquisitions. Since there are no theories specifically focusing on integration and control processes of EM MNCs, this paper builds five expectations, based on US- and Eurocentric theories. The expectations were more or less met. The case displayed a rapid internationalization process in order to acquire strategic assets. It also displayed ingenious strategies to keep production costs down. In line with expectations, it showed as well as a low degree of management turnover. However, the expectation that there would be no interference in marketing and financial integration was only partly met. The interference consisted in supplying design and low cost products when needed. The fifth expectation was met, in the sense that the relationship between BFL and Kilsta can be categorized as symbiotic. In terms of control, however, the evidence from the case study suggests that the distinction between strategic and operational control is indistinct. The match between the theoretical framework and the case suggests that prior theories to a large extent are useful for understanding post acquisition processes of EM MNCs. There may also be some room to amend these theories to better fit a globalized world, in which various resources seem to be somewhat more evenly spread than before.
Place, publisher, year, edition, pages
Mergers and Acquisitions, EM MNCs
IdentifiersURN: urn:nbn:se:uu:diva-156803OAI: oai:DiVA.org:uu-156803DiVA: diva2:433377
UppsokSocial and Behavioural Science, Law
Jonsson, Stefan, Senior Lecturer