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Value Creation within the Construction Industry

A Study of Strategic Takeovers


Joachim Vogt

Mergers & Acquisitions (M&A) are important strategic business options for corporations. Yet, the understanding of industry-specific drivers of M&A transactions is more than limited. Characterized by highly fragmented markets, cross-company production structures and increasing international business scope, the construction industry represents an attractive field of research to address questions on M&A motives. Based on comprehensively selected datasets and state-of-the-art empirical methods, the study illustrates the motives, the strategy and the effects of M&A transaction within the construction industry. Overall the analyzed M&A transactions tend to lead to an increase of corporate wealth. Important factors for a positive development comprise the peculiarities of the construction industry, the general market conditions and the nature of many takeovers. Still, the M&A transactions may also cause significant value destruction and may even lead to a failure of a company if an inappropriate strategy is applied.


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List of Abbreviations XVII


XVII List of Abbreviations ACS Actividades de Construccion y Servicios AG Aktiengesellschaft BHAR Buy-and-Hold Abnormal Return CAR Cumulated Abnormal Return CAAR Cumulated Average Abnormal Return CB Combined Portfolio CDAX Composite Deutscher Aktienindex CEO Chief Executive Officer DSI Dyckerhoff Systems International DYWIDAG Dyckerhoff und Widmann AG E España EBIT Earnings before Interest and Taxes EBT Earnings before Taxes EPS Earnings per Share GDP Gross Domestic Product GmbH Gesellschaft mit beschränkter Haftung ICE Intercity Express IPO Initial Public Offering IRL Ireland ISIC International Standards of Industrial Classification M&A Mergers and Acquisitions M/B Market to Book MV Market Value MTBV Market to Book Value n.a. not available NObs Number of Observations OLS Ordinary Least Square XVIII PLC Public Limited Company PPP Public Private Partnership RBS Royal Bank of Scotland R&D Research and Development REIT Real Estate Investment Trust ROCE Return on Capital Employed ROE Return on Equity SIC Standard Industrial Classification UBW Universal-Bau Walter UK United Kingdom US United States USD United States Dollar WTB Walter-Thosti-Boswau

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