The Control Mechanism of Trust

Sammanfattning: Over the last decade, there has been an observed increase in the number of completed mergers and acquisitions (M&A). However, there is an ongoing debate about whether these are value-creating or not. While some research points to low value creation in the overall M&A market, the niche of serial acquisitions seems to constitute an exception. Year after year, Nordic serial acquirers have succeeded in generating high levels of growth. This thesis aims to understand what control mechanisms a serial acquirer deploys to manage its portfolio companies and how these are combined. This is examined through semi-structured interviews with employees from the Swedish OMXS30-traded serial acquirer "Tech Corp." and its portfolio companies. Tech Corp. is known for being a highly decentralized organization with largely independent entities, and they describe their management control on the portfolio companies as highly limited with minimal interference. On the contrary, this study found that Tech Corp. does deploy several control mechanisms to create alignment. However, these control mechanisms are characterized by more indirect control rather than actual steering, and trust appears to play a vital role in Tech Corp.'s relationship with its portfolio companies.