The Art of Serial Acquisitions A study of the Swedish Serial Acquiring Elite’s Post-Acquisition Integration

Abstract

Acquisitions are a widely used strategic tool for organizational growth in numerous sectors and industries. The Swedish serial acquirers have developed the business model into a dual engine model with organic and acquired growth through a series of annual acquisitions in a decentralized management structure. The purpose of this study is to explore the factors influencing post-acquisition integration, the extent to which subsidiaries are integrated, and how subsidiaries are strategically acquired and utilized by the Swedish Serial Acquirers. The analysis is guided by transaction cost economics, the resource-based view, knowledge transfer and absorptive capacity and dynamic capabilities theory. The Swedish Serial Acquirers operates with a business model to grow both organically and through acquisitions, organically, the organization cannot maintain the targeted goal towards its shareholders, therefore acquisitions to grow. The post-acquisition integration process varies with regards to the nature of the acquisition, platform or add-on acquisition. The Swedish serial acquirers conduct acquisitions to achieve a scalable growth of the organization that would be to challenging to reach organically, the vast majority, has set targets of growth rates within the range of 10–20%. This communicated targets towards the shareholders drives a deliberate and constant business model where new firms are incorporated as wholly owned subsidiaries under a decentralized corporate structure. The return on invested capital (ROIC) sets the pace at which the organization can grow, since capital is compounded effectively into new subsidiaries. The level of integration varies with regards to acquisition, whether it’s a platform acquisition or an add-on acquisition.