RESOURCE REDEPLOYMENT FOLLOWING HORIZONTAL ACQUISITIONS IN EUROPE ANDNORTH-AMERICA, 1988-1992

This paper studies redeployment of resources between target and acquir ing businesses following horizontal acquisitions. The analysis draws f rom perspectives that emphasize the strategic importance of resources that are subject to market failure. We define a five-part typology of R&D, manufacturing, marketing, managerial, and financial resources. We show that targets and acquirers frequently redeploy resources followi ng horizontal acquisitions, especially resources that frequently face market failure. We then show that the magnitude of redeployment of eac h type of resource increases with the asymmetry of, the merging busine sses' relative strength on the resource dimension. The research stress es evolutionary Perspectives on business organizations that emphasize the importance of organizational differences in competitive markets Th e central premise of our research is that the market for businesses is often more robust than the market for resources. (C) 1998 John Wiley & Sons, Ltd. Strat. Mgmt. J. Vol. 19, 631-661 (1998).