Determinants of International Acquisition Success:: Lessons from FirstGroup in North America

This paper proposes a process model of key determinants of international acquisitions success, drawing on strategic management, organisational and learning theories. The validity of this model is tested through the analysis of the successful acquisition by FirstGroup, the UK’s largest provider of public transport, of Ryder, the second largest player in the US School Bus industry. The case demonstrates the importance of identifying a target in a market sector in which the UK has a competitive advantage and which fits well with the acquirer’s core business. Going against the grain of theory on integration, findings also show that, under certain conditions, low integration can yield significant benefits, leaving further integration as an option for the future, to create further value. The impact of cultural fit on acquisition performance is found to be dependent upon the level of integration adopted. The capacity of the acquirer to learn from previous acquisition experience is critical in ensuring the successful management of both pre- and post-acquisition phases. The theoretical and practical implications of the findings are discussed.