Abstract:
Merger and acquisition (M&A) strategies have been very popular for many years as a
means to drive growth and strategic competitiveness. But the question is, what are the
motives for M&A transactions? This research seeks to identify, analyse and understand
the motivation for mergers and acquisitions in the South African construction industry for
companies listed on the Johannesburg Stock Exchange, to offer insights to managers
concerned with acquisitive growth strategies. The research adopted a qualitative
research method, using a thematic content analysis of secondary data obtained from the
Competition Tribunal, annual reports and news reports.
The findings were supported and rooted in the resource-based view theory of the firm,
proving that construction companies undertake horizontal acquisitions to achieve
synergies and efficiencies in production and for integration and complementarity of
resources as well as a means to gain access to new markets. Vertical acquisitions are
undertaken to expand or strengthen capacity, pursuit of growth, the attainment of market
reach and market share as well as the desire to be more competitive in the market.
Vertical acquisitions are also made for the purpose of improving synergies and
efficiencies, as well as being able to offer or supply services along the entire value chain.
