Similar and Different: Architectural Complementarity in Target Selection by Horizontal Acquirers
1080 South University
Ann Arbor, Michigan 48109-1106
This study examines the choice of Merger and Acquisition (M&A) targets by horizontal acquirers. Taking a multi-dimensional perspective, we argue that in order to maximize both the potential and realization of synergies from horizontal acquisitions, acquirers will pursue architectural complementarity, i.e. they will balance differences on one dimension with similarity on others. Results from an analysis of horizontal acquisitions in the Chinese beer industry from 1999 to 2007 provide support for our theory. The paper contributes to the acquisition literature by resolving the long-standing debate between the need for similarity or complementarity in acquisitions, while shedding new light on the factors that drive acquirers target selection.
Xun (Brian) Wu is an Assistant Professor of Strategy at the Ross School of Business at the University of Michigan. He received his B.S. from Tsinghua University in China, M.Sc. from National University of Singapore, and Ph.D. from the Wharton School at the University of Pennsylvania prior to joining the Ross School of Business in 2007. Brian Wu's work focuses on the interactions of firm capabilities, corporate strategy, and industry evolution. This research addresses issues such as market entry, corporate diversification, firm innovation, and entrepreneurship. His work has been published or is forthcoming in Management Science and Strategic Management Journal. His research has also been recognized with several awards, including the AOM Technology and Innovation Management (TIM) Division Stephan Schrader Best Conference Paper Award and the US Small Business Administration Best Student Paper Award. In addition, his dissertation is a finalist for the INFORMS Organization Science Dissertation Proposal Competition. More recently, he was nominated for the Ross Junior Faculty Research Award, was a runner-up for the Academy of Management Technology and Innovation Management Division Past Chairs Emerging Scholar Award, and won the 3M Nontenured Faculty Award.