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ADVANCES IN MERGERS AND ACQUISITIONS

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ADVANCES IN MERGERS AND ACQUISITIONS

Series Editors: Cary L. Cooper and Sydney Finkelstein

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ADVANCES IN MERGERS AND ACQUISITIONS - VOLUME 20

ADVANCES IN MERGERS AND ACQUISITIONS

EDITED BY

CARY L. COOPER

University of Manchester, UK

AND

SYDNEY FINKELSTEIN

Tuck School of Business at Dartmouth College, USA

United Kingdom – North America – Japan – India – Malaysia – China

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Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2021

Copyright © 2021 Emerald Publishing Limited

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-80071-720-6 (Print)

ISBN: 978-1-80071-719-0 (Online)

ISBN: 978-1-80071-721-3 (Epub)

ISSN: 1479-361X (Series)

Contents

About the Series Editors

Cary L. Cooper is the Author and Editor of more than 175 books and is one of Britain’s most quoted business gurus. He is the 50th Anniversary Professor of Organizational Psychology and Health at Alliance Manchester Business School, University of Manchester, UK. He is the President of the Chartered Institute of Personnel and Development, former President of the British Academy of Management, a Companion of the Chartered Management Institute and one of only a few UK Fellows of the (American) Academy of Management, past President of the British Association of Counselling and Psychotherapy and Past President of RELATE. He was the Founding Editor of the Journal of Organizational Behavior, former Editor of the scholarly Journal Stress and Health and is the Editor-in-Chief of the Wiley-Blackwell Encyclopaedia of Management; now in its 3rd edition. He has been an Advisor to the World Health Organization, ILO, and EU in the field of occupational health research and wellbeing, was Chair of the Global Agenda Council on Chronic Disease of the World Economic Forum (WEF) (2009–2010, and a member of the Global Agenda Council on mental health of the WEF) and is Immediate Past Chair of the Academy of Social Sciences (comprising 47 learned societies in the social sciences and 90,000 members). He was awarded the CBE by the Queen in 2001 for his contributions to organizational health and safety; and in 2014 he was awarded a Knighthood for his contribution to the social sciences.

Sydney Finkelstein is the Steven Roth Professor of Management and Director of the Center for Leadership at the Tuck School of Business at Dartmouth College, where he teaches courses on Leadership and Strategy. He also has experience working with executives at Dartmouth and other prestigious universities around the world. He holds degrees from Concordia University and the London School of Economics, as well as a PhD from Columbia University in Strategic Management. He has published 23 books and 85 articles, with several bestsellers, including the #1 bestseller in the United States and Japan, Why Smart Executives Fail. On Fortune Magazine’s list of Best Business Books, the Wall Street Journal called it “a marvel – a jargon-free business book based on serious research that offers genuine insights with clarity and sometimes even wit […] It should be required reading not just for executives but for investors as well.” His latest bestselling book is SUPERBOSSES: How Exceptional Leaders Master the Flow of Talent, which was named one of Amazon’s “Best Books” on business and leadership for 2016. LinkedIn Chairman Reid Hoffman calls it “a leadership guide for the Networked Age.” He is a Fellow of the Academy of Management. He has had three books nominated for the Academy of Management’s Terry Book Award, the most prestigious such honor in the field. He is a Recognized Thought Leader on leadership, strategy, and corporate governance, and is listed on the “Thinkers 50,” the most prestigious ranking of management thinkers in the world. He is well-known for his keynote speeches and television appearances, and is a Regular Columnist for the BBC.

About the Contributors

Sunbir Alam is currently working at Microsoft Corporation. He has previously worked at Google and eBay. He has corporate experience in cloud computing and cyber security, quantum computing, artificial intelligence and machine learning, mobile platforms and ecosystems, start-ups and innovation and business development, and M&A in the technology industry. He has founded two start-ups in the space of Blockchain and cyber security and artificial intelligence. His research interests are in the areas of mergers and acquisitions, strategic alliances, quantum computing, artificial intelligence, machine learning, genomics, and geospatial science.

Fadi Alkaraan is a Senior Lecturer in Accountancy and Finance at Lincoln International Business School, the University of Lincoln (UK). He completed his postgraduate degrees (MA and PhD Accounting and Finance) at Manchester Business School, the University of Manchester. He held various teaching and research positions at Business Schools including the University of Manchester (UK), Abu Dhabi University and UAE, Grafton College of Management Sciences and Cork University Business School (Ireland), and Aleppo University (Syria). He is Adjunct Professor at Jinan University (Lebanon). His research interests mainly focus on business model transformation in large UK companies toward I4.0 strategy, M&A performance, strategic investment decision-making and investment appraisal techniques, the influence of corporate governance practices on organizational performance, and the influence of strategic control mechanisms on strategic investment decision-making toward long-term sustainable business model.

Vassiliki Bamiatzi serves as a Professor of Strategy and International Business at the University of Sussex Business School, and as Director for the International Business and Institutional Development, CIBID, Hub. She has worked at the University of Liverpool Management School, and at the Leeds University Business School. Before joining academia, she worked for six years as a Small Business and Regional Development Consultant. Her research spans a range of topics in corporate strategy, entrepreneurship, and international business, and has a particular interest on the impact of the external environment on strategy and firm performance. Her research has been published in peer-reviewed journals, such as Strategic Management Journal, the Journal of World Business, and International Business Review, among others. She is a Research Associate at the Georgia State University (CIBER), Associate Editor of the Rutgers Business Review, and as Editorial Board Member for the Journal of Business Research.

Konstantinos Bozos serves as a Professor of International Accounting and Finance at the Leeds University Business School. Prior to joining academia, he held professional positions as a Financial Analyst, Management Consultant and Equities Trader for multinational asset managers. His research covers a range of topics in corporate finance with a particular interest on corporate mergers and acquisitions, as well as financial reporting and governance and their intersections with institutional change. His research has been published in peer-reviewed journals, such as the Strategic Management Journal, the European Journal of Operational Research, the Journal of World Business, the International Journal of Production Economics, the Journal of International Financial Markets, the Review of Quantitative Finance and Accounting, and others. He is a Research Associate at the Georgia State University (CIBER, J. Mack Robinson College of Business), an Associate Editor of the Rutgers Business Review, and a Co-chair of the International Symposium in Finance.

Tamer Cavusgil serves as Fuller E. Callaway Professorial Chair at Georgia State University’s Robinson College of Business, and as Executive Director, CIBER, a National Resource Center in International Business. He is an Elected Fellow of the Academy of International Business (AIB) and has also served as Vice President of the AIB. He specializes in the internationalization of the firm, global strategy, emerging markets, and buyer–seller relationships in cross-border business. Having authored more than two dozen books and some 200 refereed journal articles, his work is among the most cited contributions in international business. Various reviews have listed him as one of the most influential and prolific authors in international management. Google Scholar lists him among the top five scholars in the world in international business, international marketing, emerging markets, and export marketing. He is also the Founding Editor of the Journal of International Marketing and Advances in International Marketing.

Brian L. Connelly is a Professor and the Luck Eminent Scholar at Auburn University’s Harbert College of Business. He earned his PhD from Texas A&M University and teaches Strategy to undergraduate and graduate students. Prior to entering academia, he worked in international business development and M&A with two Fortune 500 companies. He has lived, worked, and studied in Europe, Asia, and throughout North America.

Magnus Frostenson is a Professor of Organization and Leadership at Østfold University College, Norway. His research is primarily oriented toward business ethics, CSR, and the management of professions. He has also done substantial research on mergers and acquisitions, particularly post-merger consequences for employees.

Dr Emanuel Gomes is an Associate Professor at Nova School of Business and Economics, Universidade Nova de Lisboa, Portugal. His research interest is in the areas of M&A, strategic alliances, digital product service innovation, strategic agility, and firm internationalization, particularly in the African context. He currently serves as the Regional Editor (Africa) of the Journal of Knowledge Management. He is the Author of various books, including Mergers, Acquisitions and Strategic Alliances, published by Palgrave Macmillan, Mergers and Acquisitions as Strategic Methods of Business Development in the Global Automobile Industry, Acquisitions in the UK Car Industry: A Comprehensive Analysis of the Merger Processes, and of several papers published in international refereed journals.

Qile He, PhD, is a Professor of Strategy and Performance Management at the University of Derby, UK. He was previously the Associate Head of School for Research of the School of Strategy and Leadership at Coventry University. His research interests lie in areas of interfirm alliances and supply chain partnerships, as well as innovation strategy and processes of organizations. He has published over 80 papers in refereed journals, books, and leading international conference proceedings. He has supervised multiple PhD candidates to completion. He is an Elected Council Member of the British Academy of Management.

Benjamin Kempton is a second-year PhD student at the University of North Carolina at Greensboro, USA. His research interests include corporate strategy, competitive advantage, and mergers and acquisitions. He currently works at the University of North Carolina Wilmington, USA.

David R. King is the Chair and Higdon Professor of Management at Florida State University, where he teaches undergraduate and graduate Business Strategy. He earned his PhD in Strategy and Entrepreneurship from Indiana University’s Kelley School of Business. Before joining academia, he managed aircraft procurement for the US Air Force. Dave’s research focuses on complementary resources, merger and acquisition (M&A) integration and performance, technology innovation, and defense procurement. An award-winning researcher, his research appears in leading management journals.

Carlo Mari, University of Molise (IT), PhD in Management, is currently an Associate Professor of Marketing. His research interests are transformative consumer research (particularly social marketing, sustainable urban mobility, diversity, and inclusion), management and marketing education (particularly experiential learning and PhD education), qualitative research methods in management and marketing research, and the bicycle industry (particularly history of marketing practice and product variety). Prior to joining academia, he worked in the automotive industry as an Organizational Analyst and, subsequently, as an Assistant Product Manager.

Olimpia Meglio, University of Sannio (IT) PhD in Management, is currently an Associate Professor of Corporate Strategy. She held visiting positions at ESADE (Barcelona), Copenhagen Business School (Frederiksberg), and Florida State University. Her research interests revolve around corporate strategies, family business, and process research. Her works have appeared in renowned international journals, such as Human Resource Management, Long Range Planning, Journal of Business Research, and R&D Management. She co-edited a companion work about M&As (with Annette Risberg and David R. King) and coorganized tracks and a symposium about M&As at the EURAM conference.

Mats Persson is an Associate Professor at Østfold University College, Norway. He has an interest in organizational change in general, and mergers and acquisitions in particular. In his PhD, he studied an attempted merger between three Norwegian university colleges.

Paul Pryzant is a Partner at Seyfarth Shaw LLP, has represented clients in a variety of mergers and acquisitions, equity and debt financings, and other corporate transactions for over 35 years.

Riikka M. Sarala is an Professor of International Business at the University of North Carolina at Greensboro, USA. Her research focuses on corporate strategy, particularly related to socio-cultural, knowledge, and innovation dynamics in mergers and acquisitions and multinational corporation. She is a co-editor of a book Mergers and Acquisitions in Practice by Routledge.

Andrew J. Sherman is a Partner and Chair of the Corporate Department in the Washington, D.C. office of Seyfarth Shaw with over 900 lawyers worldwide. He is the Author of 26 books on business growth, capital formation, M&A, and the leveraging of intellectual property, including Mergers and Acquisitions from A to Z. The fourth edition was published by AMACOM in 2018. He is also the Author of the 2nd edition of the Due Diligence Strategies and Tactics, which was published in the Spring of 2010.

Wei Shi is an Associate Professor of Management at University of Miami. He obtained his PhD in Business Administration from Rice University. His primary research interests are at the intersections of corporate governance, upper echelons, and corporate strategy. His research has been published at outlets such as Academy of Management Journal, Strategic Management Journal, Journal of Management, and Journal of Corporate Finance. He is an Editor of Corporate Governance: An International Review and sits on the editorial boards of Strategic Management Journal, Organization Science, Journal of Management, and Global Strategy Journal.

Introduction

Cary L. Cooper and Sydney Finkelstein

This is the 20th Anniversary of our annual Advances in Mergers and Acquisitions series. And it is surprising to us the amount of new, innovative and insightful research and practice that has taken place in this last year, particularly during the pandemic and post-Covid era. But with the constellation of worldwide events of a pandemic, the global recession and world political events (e.g., Brexit, US elections, new regional trade alliances, etc.), many organizations are seeing real opportunities in merging, acquiring and partnering with others to get the added value during these difficult and challenging times.

We have eight outstanding chapters, from scholars and practitioners in a variety of countries exploring issues relevant to a post-Covid world and the ensuing recession. In the first chapter, by Andrew Sherman and Paul Pryzant, the authors highlight an M&A guidebook for a post-pandemic world, that is, creative in its ways to bridge the gaps between buyers and sellers post-Covid. The unpredictability of the global economy makes it more risky to consider acquisitions, very difficult to predict future earnings and, therefore, to put valuations on businesses. The authors explore why buyers and sellers want or don’t want to do a deal in this environment, and all the issues associated with the post-Covid business world.

Chapter 2, by Konstantinos Bozos, Vassiliki Bamiatzi and Tamer Cavusgil, explores the role of organizational slack and acquisition experience in mitigating cross-border acquisition uncertainties. Given that cross-border acquisitions exceeded $1.2 trillion in 2019, exploring the “black box” of cross-border acquisition success is very important and critical during the recession and beyond. Chapter 3 follows on highlighting the importance of ensuring acquisition completion after announcement, to ensure it is well managed. As the authors, David R. King, Wei Shi and Brian L. Connelly, suggest, it is vital that managers react to counter signals by shareholders, media, analysts and short sellers in terms of acquisition completion, that is, that external governance actors are instrumental for any successful merger or acquisition.

Fadi Alkaraan, the author of Chapter 4, highlights how Covid and the recession have made M&A investment decision-making a priority and toward an Industry 4.0 strategy. This means integrating all the technologies, supply chains and production processes – he highlights what this means for M&As in the future, and what research needs to be done. Mats Persson and Magnus Frostenson take this a bit further exploring the cultures of merging organizations, metaphorically as a “marriage.” They highlight three aspects of this metaphor: sequence of events, number of partners and power relations in this marriage. This will help to understand whether this relationship will work in the long run, and how it will function and develop.

Carlo Mari and Olimpia Meglio provide a very novel chapter in focusing in on “how customers experience an acquisition and whether merging firms perceive their customers as assets to trade or as stakeholder to engage.” They review the existing research into the customer-based experience of M&As, suggesting four research avenues for future studies. Moving from customers perspectives on M&As to employees, Benjamin Kempton and Riikka Sarala do a systematic and state-of-the-art literature review of the studies. Their primary aim is to understand the role of the employee in M&As. They examine five distinct research streams: employee reactions, culture, communications, knowledge and speed, highlighting the existing research foci and where research should go in the future.

And the final chapter in the book, by Emanuel Gomes, Sunbir Alam and Qile He, advocates the importance of the field of M&As from learning on the success and failures in strategic alliances. With such high failure rates in M&As, and the similarity in many regards between the issues experienced in strategic alliances, there is a need for each of these fields to learn from the other – research from both is highlighted to begin this process.

We would like to thank our contributors for their interesting and important contributions, and hope this will enable practitioners and researchers in their quest for enhancing the benefits of mergers and acquisitions and minimizing the downsides in the future.