Value creation within the construction industry

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Mergers & Acquisitions (M& A) are important strategic business options for corporations. Yet, the understanding of industry-specific drivers of M& A transactions is more than limited. Characterized by highly fragmented markets, cross-company production structures and increasing international business scope, the construction industry represents an attractive field of research to address questions on M& A motives. Based on comprehensively selected datasets and state-of-the-art empirical methods, the study illustrates the motives, the strategy and the effects of M& A transaction within the construction industry. Overall the analyzed M& A transactions tend to lead to an increase of corporate wealth. Important factors for a positive development comprise the peculiarities of the construction industry, the general market conditions and the nature of many takeovers. Still, the M& A transactions may also cause significant value destruction and may even lead to a failure of a company if an inappropriate strategy is applied.