Emerging multinationals investing in developed countries: Key factors for a successful cross-border acquisition

Abstract

Purpose

The aim of this work is to investigate the key factors that lead to a successful deal in the case of acquisitions of Western companies by multinationals from emerging countries (EMNCs).

Design/methodology/approach

This study adopts a qualitative paradigm and uses a case study method as a tool of analysis. The case concerns Fondalmec, an Italian unlisted medium-sized joint stock company. The company was acquired in 2007 by the Indian multinational Endurance. Primary data were collected through semi-structured interviews and integrated with secondary data retrieved from relevant documents such as annual reports prepared before and after the acquisition.

Findings

Research findings show that EMNCs have some country-specific characteristics, which should be adequately assessed and realigned to the characteristics of the host country and targets’ resources during both the evaluation phase and the integration process.

Research limitations/implications

The research limitation is attributed to there being only one case study analysis.

Practical implications

The study recommends examining the country of origin of the acquirer and suggests EMNCs’ managers to prefer a “light-touch” integration of Western target companies to gain access to their intangible assets and achieve success.

Originality/value

This work differs from much of the existing literature on mergers and acquisitions because it focuses on EMNCs and analyses the target company together with the buyer and their post-operative development strategy. Furthermore, it is one of the few empirical research studies on non-listed companies, which are often overlooked given the greater difficulty of accessing data.

Citation

Aureli, S., Ciambotti, M. and Dragoni, A. (2017), "Emerging multinationals investing in developed countries: Key factors for a successful cross-border acquisition", Management Research, Vol. 15 No. 1, pp. 124-142. https://doi.org/10.1108/MRJIAM-02-2016-0643