Driving Forces and Success Factors for Mergers, Acquisitions, Joint Ventures, and Strategic Alliances Among Local Cooperatives

The trend toward greater consolidation in agricultural production and in agribusiness is creating the conditions that squeeze local farm supply and grain marketing cooperatives from three directions. As farms become larger and fewer in number, each individual farmer-customer is more critical, making relationships and services offered more important than ever before. At the same time that each customer has a greater impact on the cooperative’s bottom line, the competition is also consolidating, creating a fiercer “survival of the fittest” marketplace. On the other side of the local cooperatives’ business, suppliers and grain marketing firms are also fewer and larger, limiting choice and bargaining power for local cooperatives. In response, local cooperatives are engaging in a variety in business arrangements, including strategic alliances, joint ventures, mergers, and acquisitions. This paper has two objectives. The first is to examine the driving forces that motivate local cooperatives to get involved in strategic alliances, joint ventures, mergers and acquisitions. The second is to examine the relative importance of factors in the success of these new business arrangements.

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 Record created 2018-11-15, last modified 2020-10-28

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