Do Synergies Exist in Related Acquisitions? A Meta-Analysis of Acquisition Studies

Abstract

Mergers and Acquisitions (M&A) aim to increase wealth for shareholders of the acquiring company, in particular by creating synergies. It is often assumed that relatedness is a source of synergies. Our study distinguishes between business, cultural, technological and size relatedness. It discusses the reasons why these different forms of relatedness can lead to an acquisition success and conducts a meta-analysis of 67 prior M&A studies. Results indicate that positive effects can be expected under specific conditions only and have a limited overall impact on acquisition success. A moderator analysis finds that synergies stemming from relatedness depend on industry-, country-, and investor-characteristics.

Keywords: M&A, acquisitions, synergies, meta-analysis, managerialism, hubris

JEL Classification: G34, G31, G24, G12, D82