How Do Turnarounds Manage their Mergers and Acquisitions?

This dissertation is focused upon identifying how turnarounds manage their mergers and acquisitions. The initial task involved selecting a sample of 40 firms totally (10 UK public listed firms from 4 industries) and determining which of these firms may be labelled as turnarounds in their industries and which may be labelled as failing firms. As a result there were 8 cases in total that would be evaluated further. (4 turnaround firms and 4 failing firms) Subsequently, a cross case analysis research method was carried out in an effort to determine factors on how turnarounds conduct their acquisitions. There was strong evidence that suggested turnarounds tend not to diversify through their acquisitions and that they are prone to acquiring firms in foreign markets. The results also proposed that turnaround firms made growth through acquisitions part of their primary objective and were quite keen on acquiring firms that had complementary strengths, strategy and vision to their own firm. A very interesting finding was that turnaround firms in this paper did not seem to have a retrenchment stage in their recovery process. Certain previous turnaround literature contains the idea that poor performing firms must have a retrenchment stage in their recovery process if they want to experience better performances. However it should be noted that this paper studied firms that were in high growth industries whereas most prior literature on turnarounds evaluated firms in declining industries. It is suggested that as the findings in this paper are not consistent with the theory of retrenchment, more modern research should be performed with the consideration of turnarounds in high potential growth industries in order to test this hypothesis. Overall the findings could be linked to various economic and corporate strategy theories which provided validation and strengthen the results obtained. There was also indication that certain turnarounds considered the Resource based view of the firm while participating in their acquisitions. Certain ideas for future research are discussed in the conclusion section and few limitations of this study are mentioned