The long-term success of mergers and acquisitions in the international automotive supply industry

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The highly variable success experienced by Schaeffler KG during its acquisitions of FAG Kugelfischer and Continental illustrates the complex consequences of mergers and acquisitions in the automotive supply industry. This sector's global competitive landscape is unique, shaped by the consolidation of automotive manufacturers into an oligopoly over the past two decades and a renewed focus on suppliers that is helping to stabilize power dynamics. Given that automotive manufacturers operate in international markets, the competitive environment for suppliers is inherently transnational. Recent shifts in the automotive manufacturing value chain further highlight this complexity, with some suppliers now contributing more value during car construction than the manufacturers themselves. This makes international mergers and acquisitions particularly appealing, often expected to elicit positive responses from capital markets. However, the reality may differ. Research on the long-term success of international M&A transactions is scarce, and the understanding of acquisition success within the automotive supplier industry is limited. Additionally, applying insights from other sectors to this industry raises questions about their relevance and transferability.