The Quest for Synergistic Effects in Horizontal Mergers Using Combined Transaction Cost Theory and Resource-based View: The Case of Activision Blizzard
Authors
Kaisheva, Konstantina Gosheva ; Boev, Mariana
Term
4. Term
Publication year
2014
Submitted on
2014-06-06
Pages
152
Abstract
This thesis examines how transaction cost theory (TCT) and the resource-based view (RBV) can be combined to explain when horizontal mergers generate synergies and, in turn, competitive advantage. Using the 2008 merger of Activision and Blizzard Entertainment as a case, the study poses three research questions about: (1) integrating TCT and RBV to understand synergy in horizontal integration, (2) how the merger delivered operational efficiency and competitive advantage, and (3) the consequences of synergy for industry structure and performance. The authors adopt a systems view (Arbnor & Bjerke, 2009) and qualitative methods based on secondary data (literature and document analysis), complemented by a DCF valuation of Activision and Vivendi Games as stand-alone firms in 2007 and of the merged entity in 2010. They propose a combined TCT–RBV framework showing that access to complementary, strategically valuable resources and internalization choices can reduce transaction costs and enable synergy. The DCF results indicate a 2010 stand-alone value for Activision Blizzard of $10.851 billion, consistent with post-merger operational efficiency. Furthermore, the analysis suggests that overall industry performance improved after the merger, while rival Electronic Arts experienced negative operating performance. The thesis contributes a framework that extends TCT and RBV to horizontal integration and offers a starting point for further academic discussion of synergies and their market consequences.
Specialet undersøger, hvordan transaktionsomkostningsteori (TCT) og resource-based view (RBV) kan kombineres for at forklare, hvornår horisontale fusioner skaber synergier og dermed konkurrencemæssige fordele. Med udgangspunkt i fusionen mellem Activision og Blizzard Entertainment (afsluttet i 2008) formuleres tre forskningsspørgsmål om: (1) kombinationen af TCT og RBV som forklaringsramme for synergiskabende horisontal integration, (2) hvordan fusionen førte til operationel effektivitet og konkurrencefordele, og (3) hvilke konsekvenser synergien havde for branchestruktur og performance. Metodisk anvendes et systemsyn (Arbnor & Bjerke, 2009) og kvalitative metoder baseret på sekundære data (litteratur- og dokumentanalyse), suppleret af en DCF-vurdering af Activision og Vivendi Games som selvstændige enheder i 2007 og af den fusionerede virksomhed i 2010. Forfatterne udvikler en kombineret TCT–RBV-ramme, der peger på, at kombinationen af komplementære, strategisk værdifulde ressourcer og internalisering af aktiviteter kan reducere transaktionsomkostninger og skabe synergi. DCF-analysen viser en selvstændig værdi for Activision Blizzard i 2010 på 10.851 mia. USD, hvilket indikerer operationel effektivitet efter fusionen. Desuden fremgår det, at branchens samlede performance efter fusionen var positiv, mens rivalen Electronic Arts’ driftsmæssige performance var negativ. Specialets bidrag er en ramme, der udvider TCT og RBV til at omfatte horisontal integration, og som tilbyder et udgangspunkt for videre akademisk diskussion om synergier og deres markedsmæssige konsekvenser.
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