As a result of economic and structural changes, the automotive supply industry has been facing significant consolidation activity over the last twenty years. The pressure to produce better equipped and less expensive automobiles created a growing trend towards specialization and internationalization among automotive suppliers. For many players, mergers and acquisitions (M&A) became a common strategic response to these trends inducing increasingly dominated product ranges and a truly global competition. Consequently, the number of existing suppliers has been continuously decreasing: In Europe, for example, the number of direct suppliers dropped from 10,000 in the early 1970s to 3,000 in 1995 and to an estimated 500 in the year 2000 (Sadler (1999)). Between 1991 and 1999, horizontal M&A transactions with more than USD 50 million transaction value steadily increased both in total numbers as well as in total volume. While the influence of this potential merger wave appeared to weaken after the year 2000, the multi-billion dollar transactions involving German Continental AG in 2007 and 2008 have recently revived consolidation discussions and potentially indicate the start of a next major consolidation wave.
KeywordsCapital Market Abnormal Return Natural Rubber Creation Potential Announcement Return
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