Globalization of construction and real estate companies through mergers and acquisitions

Abstract

This thesis examines the globalization of construction and real estate companies through mergers and acquisitions using a modem management approach and a practical analysis of selected case studies. It particularly focuses on mergers and acquisitions because they are changing the way firms do business in the global markets. Four companies have been selected in order to analyze the interactions between acquirers and targets in the international construction and real estate markets. The first is the successful Scandinavian construction and real estate firm Nordic Construction Company, which has based its growing strategy on mergers and acquisitions. This Swedish case represents strong evidence that managerial leadership at the top levels can make or break the acquisition process. In the second case study, the Irish Conglomerate CRH takes over smaller American businesses in order to enter the huge US market. The third case is about the homebuilding industry, where the largest and most successful firms have grown rapidly through mergers and acquisitions. The example here is the highly admired Centex Corporation, which has experienced considerable increases in revenue and profitability. The fourth example is Jacobs Engineering Group from Pasadena, California. In these four cases, many different variables are considered. The number of studies in mergers and acquisitions in the construction and real estate industries are very few as opposed to other areas such as banking or telecommunications. However, it remains certain that the driver of mergers and acquisition activity are very different for each particular firm --still within the same industry. International construction and real estate markets are very close to consolidate and become one. Therefore, managers of global construction and real estate companies will need to understand this consolidation trend and learn to compete for projects that once pertained only to firms in other geographies.