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While there is an increasing understanding of the challenges that can emerge in integration processes of cross-border mergers and acquisitions, there is a scarcity of research on how the different integrative activities should be temporally sequenced. Based on an in-depth analysis of three acquisitions, we find that structural and cultural integration are intertwined. We find that cultural integration will begin only once structural integration is in progress. Cultural differences can, however, impede structural integration if structural integration is done in conflict with the existing culture of the acquired company. Thus, structural integration should come first, but it should be done in appreciation with the acquired company’s existing culture. Cultural change is then facilitated in an iterative manner over time by the new structure. Our chapter contributes to an improved understanding of the temporal dynamics of integration by demonstrating the mutually reinforcing effects of structural and cultural integration in cross-border acquisitions.

The purpose of this paper is to examine the influence of cognition on knowledge sharing between members of the acquiring and acquired organisations in the post-acquisition integration process. It specifically analyses differentiation between in-groups and out-groups, the perception of organisational identity and interaction among members of the acquired and acquiring organisations and how these three factors affect knowledge sharing.

The authors develop theoretical propositions and conduct an explorative pilot study on the basis of original interview data conducted with ten respondents in four Indian IT companies that have acquired firms abroad.

The authors find evidence for supporting the negative effect of in- and out-groups differentiation and the positive effect of interpersonal interaction on knowledge sharing among employees of the acquired and acquiring organisations. There was indicative, but less compelling, evidence for the negative influence of inter-group competition and the positive influence of perceived shared organisational identity on knowledge sharing. Different from the established view, the authors find that when Indian firms acquire firms abroad, they immediately initiate knowledge flows from the targets rather than going through a long period of integration prior to acquiring knowledge from the targets.

The paper contributes to the scholarly conversation on cognition and knowledge sharing and argues that firms that are located in developing economies and that acquire firms abroad behave in a way somewhat different from what Western literature postulates. This invites for further studies, both theoretical and empirical, to shed light on this phenomenon. The present paper is focused only on one country, India, and on a single industry, the IT industry. It is limited in its empirical part, mainly due to enormous difficulties in getting access to the field.

The study demonstrates how central individuals are to the process of knowledge sharing and the accomplishment of organisational objectives in a post-acquisition context. Managers should understand that the knowledge their employees possess is a strategic asset, and therefore how they use it is influential in attaining organisational goals in general, and acquisition integration objectives in particular. The creation of task- and project-related communities or groups can help in establishing a shared organisational identity, especially after the turbulent event of one company acquiring another one. The creation of communities or groups where socialisation is encouraged can lead to employees interacting with one another and developing a sense of belongingness with the community or group. Over time, this belongingness can translate into a shared organisational identity, which is beneficial for the organisation. The findings suggest that the creation of task- or project-oriented communities and groups is a powerful way to achieve that.

The contribution of the paper is fourfold. First, while macro orientation dominates literature on the growth of the Indian IT industry, this study is conducted at the individual level of analysis, by focusing on managers in acquiring Indian IT firms. Second, whereas studies that have examined cognition and knowledge sharing have done so mainly through social capital lenses, this paper focuses on factors that are based on the inherent tendency of human beings to categorise themselves and other individuals. Third, the paper examines the links between cognition and knowledge sharing in an exciting context, namely, post-acquisition integration. Finally, while research on both post-acquisition integration and knowledge sharing is biased towards a Western context, this study investigates knowledge sharing and post-acquisition integration in the context of a major non-Western emerging economy.

This paper explores what differentiates success from failure in post-acquisition integration. It seeks to overcome some of the limitations of previous research by adopting a more holistic and dynamic examination of the process and by focusing on aspects that can be readily applied in practice. Four cases of mergers and acquisitions (M&A) in the global automobile industry are examined using secondary data and taking a grounded theory approach. The four cases comprise two pairs of successes and two pairs of failures. Two of the pairs comprise established multinational companies, while two others comprise emerging multinational companies’ acquisitions of Korean automakers; in each case, there was one successful M&A and one failure. It is inducted that what differentiates the successful cases from the failures is their different approaches to two common tensions in post-acquisition integration, namely, their approaches to integration strategy and people issues. A two-level framework is proposed in which post-integration is managed simultaneously and dynamically at the strategic and people levels. These inductive findings, if verified by a more broadly based empirical examination, will extend M&A theory by providing a more integrated and dynamic approach to post-acquisition integration, in which strategic and people perspectives are jointly taken into account and interact with each other, thereby creating value for both acquiring and acquired firms.

The purpose of this paper is to examine trading costs of both acquiring firms and target firms differentiated by method of payment, mode of acquisition, and deal attitude around merger and acquisition (M&A) announcements. The author calculates four spread measures of trading costs: quoted spread, percentage quoted spread, effective spread, and percentage effective spread.

Differences in spreads differentiated by M&A characteristics are calculated and two‐sample t‐tests applied. A linear regression model is developed to test whether changes in trading costs are related to acquiring firm's post‐merger price performance. The regression is estimated by OLS method.

It is found that various methods of payment affect the spreads of target firm differently on certain days around M&A announcement. For acquiring firms, significant differences are found in spreads between cash offers and stock offers, and between stock offers and mix offers. Significant difference was not found in spreads between cash offers and mix offers. The mode of acquisition affects the bid‐ask spreads of target firms only, but not those of acquiring firms. Deal attitudes affect the spreads of target firms on and after M&A announcements. It was also found that all four spread measures are significantly linked to acquiring firms’ post‐merger daily returns.

Further study can be done on mechanisms through which M&A characteristics impact trading costs.

This study suggests that M&A characteristics affect firms’ spreads and that changes in spreads need to be accounted for in explaining acquiring firms’ post‐merger daily returns.

The paper fills in an important gap in existing literature by examining trading costs of acquiring firms around M&A announcements. It provides additional evidence on the anomaly of acquiring firm's negative post‐merger returns. The paper is intended to help improve the understanding of trading costs and the behavior of the market participants in response to a major corporate event.

This paper reports preliminary evidence on pre to post‐event shifts in the estimated values of the parameters, alpha and beta, of the simple regression market model. Samples, of US and British firms engaged in cross‐country acquisition, during the period 1970–1980 are examined. Using pre, pooled, and post‐event estimation periods, both alpha and beta show pronounced shifts in estimated value from the pre to the post‐event period. It is shown that these parameter shifts result in companion shifts in estimated pre to post‐even excess residual estimates. It is further shown, in the context of the market model, that shifts in alpha value account for approximately 80% of the shifts in excess residual estimates. Shifts in estimated beta account for only approximately 20% of the changes in estimated excess residuals. This result is interesting in regard to the results reported in most of the event study literature, which primarily consider only beta estimates.

Taking the literature on knowledge and mergers and acquisitions as a basis, the purpose of this paper is to analyze some variables that influence the knowledge transfer in mergers and acquisitions.

Using data from a sample of 57 domestic Spanish mergers and acquisitions this paper examines the influence on the transfer of knowledge from the acquired firm to the acquiring firm (or lead firm) of: the socially complex nature of the knowledge to be transferred, the knowledge base of the acquiring firm, and two dimensions of the integration process. In addition, the paper analyses the moderating effect of socially complex knowledge on the relationship: dimensions of the integration process‐knowledge transfer.

The results obtained show that the social complexity of the knowledge, the knowledge base existing in the acquiring firm, and the frequency of rich communication media have a positive influence on knowledge transfer.

The results should be interpreted with caution due to the size of the sample. Since the study was conducted in Spain the results could be affected by the cultural context. Further studies are required in order to corroborate the results and to explore these relationships over a longer period of time.

This paper offers several recommendations to help managers to improve knowledge transfer in mergers and acquisitions.

This study tests empirically a model of knowledge transfer in mergers and acquisitions that integrate key factors that can affect knowledge transfer success. This study can help one to understand the knowledge transfer better and complements the very few studies hitherto produced.

The capital markets witness phenomenal shifts of corporate control. With the shift of world economy into a global one, there has been a rapid increase in the volume of acquisitions. The previous studies shed light on the motives behind acquisition and impact of acquisition on both bidding and target firms. The purpose of this study is to bridge a gap in literature by exploring the factors affecting the acquisition ability (AA) of the firms. The study has analyzed the role of financial strength, corporate governance and regulatory influence on AA of acquiring firm.

Cross-sectional data has been analyzed with respect to Pakistan stock exchange for a period of 2004-2017 by using logit regression.

Analysis indicates that firm-specific variables are important determinants in firm’s decision to acquire. Chief Executive Officer duality and presence of institutional shareholders on the board contribute to this important phenomenon in the life of the acquiring firms. Bidding firm’s financial strength is also another important consideration while going for corporate control transfer transactions. The empirical results indicate the better AA for firms characterized by minimum capacity usage, lower level of intangible assets, lower debt levels and lower advertising expenses. However, the regulatory factor has no significant role in firms’ AA. The findings of the study are helpful for managers, regulators and policymakers.

Analyzing the role of financial strength, corporate governance and regulatory influence on AA of acquiring firm is a rare study, especially in an emerging country such as Pakistan.

The purpose of this paper is to focus on consumers’ reactions to cross-border acquisitions (CBA) by exploring the role of consumer perceptions of the psychic distance between the country of the acquirer and that of the target firm when the acquiring corporation has a good or poor reputation.

A 2×2 experimental design which manipulated psychic distance and acquirer’s corporate reputation was conducted in Italy. The study considers an Italian food target firm and compares four foreign acquiring firms with different combinations of corporate reputation (good/poor) and psychic distance to Italy (small/large).

The authors found that the degree of psychic distance between the countries of the acquiring and targeted firms was inversely related to Italian consumers’ intentions to repurchase the products of the post-acquisition target, and unrelated to the acquirer’s corporate reputation.

This is the first study focusing on psychic distance in the context of CBA, especially from the perspective of consumer behavior, which can help to better understand certain negative reactions toward the acquisition of a business.

This paper attempts to examine the impact of merger on the stock returns and economic value added (EVA) of acquiring firms to know if the mergers are successful corporate restructuring strategies for the firms.

In total, 108 Indian firms are studied using paired sample t-test and Wilcoxon signed rank test for comparing the EVA of acquiring firms in short, medium and long term after merger. The effect of merger announcements on stock returns is analyzed by way of event study. An event window of −20 to +20 is taken and an estimation window of 256 (-276 -20) days is used in the study.

The authors find that mergers lead to significant improvement in the EVA of acquiring firms. However, the increase in financial performance and EVA is witnessed only in long term. The authors did not find any significant impact of merger announcement on the stock returns of acquiring firms.

The study is a first of study's kind, which evaluates both short-term (using event study methodology) and long-term (using EVA) impact of value addition to an acquirer after Merger & Acquisition (M&A). The study contributes to existing literature on the signaling theory of announcement of M&As and synergy gain theory of completed M&As by providing evidence from the context of an emerging market like India.

The market for mergers and takeovers, often referred to as the market for corporate control [Manne (1965)], has always attracted the attention of investors and researchers because takeovers represent corporate investment decisions on a scale several times larger than the normal, ongoing, growth‐maintaining capital outlays by the typical value‐maximising firm. Although the theoretical justifications for such corporate actions are reasonably well understood, the true motives for the mergers and the strategies adopted by acquiring firms to consummate them can be complex and diverse in scope. Corporate acquisitions can therefore have widespread effects on the wealth of various groups of agents involved in the market for corporate control.