An Australian Case Study of Stakeholder Relationships in a merger and acquisition process

Abstract

This chapter examines the importance of stakeholder relationships to merger and acquisition (M&A) processes, using a case study of the AUD11 billion mega-merger in 2017 between Australian gaming groups Tabcorp and Tatts. The case study approach is adopted to consider the relevance of stakeholder management to the merger process from deal announcement to completion using documentary and semi-structured interview data. It is found that by managing critical stakeholder relationships through anticipating, pre-empting and negotiating potentially deal-breaking stakeholder conflicts, the merging parties ultimately won support for the deal from nearly all key stakeholders, thus ensuring its completion. The merger process both affected stakeholders and was in no small part affected by various stakeholder groups.

The chapter argues the need for a dynamic and dialectic understanding of how M&A processes relate to stakeholders. It offers deeper insight into how stakeholder theory can be used to enrich understanding of the broader economic, social and political implications of M&A, which enables researchers and practitioners to understand M&A outcomes for all stakeholders. The findings expand on the benefits of stakeholder analysis in relation to how stakeholders both affect and are affected by M&A processes, challenging the view that stakeholder relationships are unidirectional, static, or linear but evolve in complex patterns and along interconnected dimensions between and among stakeholder groups. This approach facilitates historical analysis, forward assessment, future planning and proactive responding, both for academics in devising theories and explanations, and for practitioners in considering, designing and implementing M&A strategies.

Citation

Segal, S., Guthrie, J. and Dumay, J. (2019), "An Australian Case Study of Stakeholder Relationships in a merger and acquisition process", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 18), Emerald Publishing Limited, Leeds, pp. 65-81. https://doi.org/10.1108/S1479-361X20190000018005