Comparative historical analysis of four UK hotel companies, 1979 - 2004
Purpose – This paper seeks to examine why and how M&A activity has been used by UK hotel companies over a 26-year period and aims to provide a preliminary exploration of its relative success, given that the M&A literature suggests high failure rates or M&A transactions which do not achieve their objectives. Design/methodology/approach – This research is based on a combination of a multiple-case study and comparative historical analysis to bring out the different levels of analysis embedded in past M&A literature and to identify changes of motives for undertaking M&A activities based on companies and their external environment. Findings – The paper finds that value maximizing motives are prevalent whilst non-value maximizing motives are not supported. The acquisition of brand names and rights is a major motive for the UK hotel industry, particularly in the light of global competition and the brand power that enables companies to expedite growth while at the same time reducing financial risks. Practical implications – This longitudinal study serves to reinforce the type of target companies, particularly those that share similar resources or end products, for acquiring companies to select from in order to expect a higher M&A success rate. Originality/value – This paper provides the first empirical study to integrate the comparative historical analysis approach with strategic management M&A theory to trace and understand how and why UK hotel companies became leading international companies. Through this interdisciplinary approach, the importance of acquiring a brand name is illustrated and identified as an essential motive, specific to the hotel industry.