New business creation through mergers and acquisitions: Findings from an interview study

The paper describes findings from an interview study about practices concerning new business creation through mergers and acquisitions (M&A). A total of 14 large Finnish service-oriented companies from different fields of industry and active in acquisitions wew studied using semi-structured face-to-face interviews. The service orientation of the companies varied from service companies to product companies that already provide some services but see services more relevant for their business in near future. In general the opportunity recognition process is loosely (or not at all) organised in the companies. However, service companies tend to have more innovation units and "plazas" to search for new ideas. Companies have two-fold approach to recognize new business opportunities - by the recognition of acquisition targets and by the recognition of new business opportunities in general (e.g. through strategy process or collaboration). Despite the service-orientation level of the companies, the selection of the implementation method is typically not a systematic process. Companies have several ways to implement a new business opportunity - including co-operation and alliances, M&A, greenfield investments and joint ventures. M&A are seen to be important vehicle for growth and access to new markets, while joint ventures are viewed as being very challenging.