A brief review of motives of mergers and acquisitions for construction industry firms

Abstract

In the changing of construction industry, mergers and acquisitions (M&As) activities taking place in construction industry firms have been increasing sharply in the recent decades. While the majority of studies in construction management are focused on the management of construction projects, there are few researches have conducted on the construction firms' expansion strategy through M&A. Actually, M&A is an important growth strategy for construction industry firms, since it allows firms to quickly achieve their ideal size and raise managerial efficiency. However, the high ratios of poor operational performance of post-merger firms raise the attention to its potential risk. Motives of M&A are one of the important factors to study the risk of M&A deals. Different motives of M&A may lead to absolutely opposite performance of M&A transactions. Therefore, the paper makes a brief review of the motives of M&A for construction industry firms based on aim extensive review of motivation theory of M&A study. The review is conducted from three different perspectives such as efficiency theory, redistribution theory and behaviour theory.