Abstract: Growth of Four UK Hotel Companies with the Use of Merger and Acquisition Activities, 1979-2004
Merger and acquisition (M&A) activities are commonly used as a form of growth strategy, and these activities have generated a broad range of management research attempting to evaluate and understand companies' performances. However, research in the past thirty years shows that the use of M&A as a tool for business expansion has yielded a high failure rate of 44-50 percent. Yet this method of growth has continued to be fashionable among business practitioners, and the motives for adopting such methods remain a puzzle to academia. It has been identified that there is a lack in the literature in which M&A activities are understood through the integration of two different levels, organizational and industry level. This paper aims to fill this gap by examining empirical findings from a sample of four UK hotel companies. Documents and interviews were used as the data collection methods. It is found that the motives of organizations (speed, economies of scale and scope, market share) and industry shocks (deregulation, technology, and foreign competition) have interacted to drive M&A activities. In addition, the development of four UK hotel companies shows that companies' performance after M&A activities could be affected by unpredictable external factors, despite the value-maximizing intention of management.