Delaney, F T and Wamuziri, S C (2001) Mergers and acquisitions in the construction industry. In: Akintoye, A (ed.) Proceedings of 17th Annual ARCOM Conference, 5-7 September 2001, Salford, UK.
Abstract
A feature of the construction sector for the past year has been the increase of corporate activity, with mergers and acquisitions at the forefront of most firm's strategies. Consolidation, by mergers and acquisitions, in the construction industry is leading to the big firms getting bigger and the small to medium companies finding it increasingly difficult to maintain competitiveness and margins. The motives behind this wave of consolidation, is the fact that financial institutions want to deal with larger companies, but also the belief that the larger the firm the greater the efficiency. Mergers are justified by the extent to which they add value, adding value requires some synergy which may be obtained by winning access to complementary assets or deriving economies of scale or scope related to the core business. There would be a significant incentive for companies to grow if the costs of production were to decrease as the scale of the operations increased. Against this background, this paper measures the benefits of size, by estimating the relation between a measure of costs and a measure of size. The Data were selected from over one hundred companies from the contracting and house building sector, materials sector and plant hire for each of the most recent five years.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | acquisitions; construction sector; merger; regression market sector; scale economies |
| Index terms: | motive, estimating, acquisition, competitiveness, construction industry, construction sector, efficiency, core busines, plant hire, merger, strategy, synergy |
| Subjects: | management, performance management, maintenance engineering, business, market analysis, industry analysis, financial and cost management, psychology, partnership management |
| Topics: | Organizational Design, Human Resources, Research Practice, Business Strategy, Stakeholder Management, Cost Management, Quality Management |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here