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This chapter aims to make sense of the growing research that examines the role of culture in mergers and acquisitions. We provide a detailed review of the many related but…
This chapter aims to make sense of the growing research that examines the role of culture in mergers and acquisitions. We provide a detailed review of the many related but distinct constructs that have been introduced to the literature. While each construct has contributed to our understanding of the role of culture, the lack of connections made among constructs has limited the consolidation of contributions. The review shows what these constructs mean for mergers and acquisitions, what major findings have been discovered, and, most importantly, how constructs interrelate. Our discussion provides several opportunities to foster the needed consolidation of this research.
The proliferation of mergers during the 70s and 80s has generatedvoluminous amounts of research with a primary focus on the impact to theshareholders from both the…
The proliferation of mergers during the 70s and 80s has generated voluminous amounts of research with a primary focus on the impact to the shareholders from both the acquired and the acquiring firms. Relatively little research has been placed on the valuation process itself, especially within the international merger setting. To fill the void, this article details a valuation process based on capital budgeting. This approach is designed for use by foreign firms contemplating mergers or acquisitions across international borders. The framework may also be used to help explain the increasing numbers of non‐US acquisitions of US firms and to make inferences about divestiture and leveraged buy‐out (LBO) activity.
Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper…
Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with an emerging economy – India, such as Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal in the oil and gas exploration industry. The study intends to explore how do institutional and political environments in the host country affect the completion likelihood of cross-border acquisition negotiations.
Nested within the interdisciplinary framework, the study adopts a legitimate method in qualitative research, that is, case study method, and performs a unit of analysis and cross-case analysis of sample cases.
The critical analysis suggests that government officials’ erratic nature and ruling political party intervention have detrimental effects on the success of Indian-hosted cross-border deals with higher bid value, listed target firm, cash payment, and stronger government control in the target industry. The findings emerge from the cross-case analysis of sample cases contribute to the Lucas paradox – why does not capital flow from rich to poor countries and interdisciplinary M&A literature on the completion likelihood of international takeovers.
The findings have several implications for multinational managers who typically involve in cross-border negotiations. The causes and consequences of sample cases would help develop economy firms who intend to invest in emerging economies. The study also offers some implications of M&A for telecommunications and extractive industries.
Although a huge amount of extant research investigates why M&A fail to create value to the shareholders during the public announcement and post-merger stages, there is a significant dearth of research on the causes and consequences of delayed or abandoned national and international deals. The paper fills this knowledge gap by discussing an in-depth cross-case analysis of Indian-hosted cross-border acquisitions.
Cross‐border mergers and acquisitions present significant opportunities for firms wishing to diversify their activities geographically, learn new knowledge, and gain…
Cross‐border mergers and acquisitions present significant opportunities for firms wishing to diversify their activities geographically, learn new knowledge, and gain access to valuable resources. Cross‐border mergers and acquisitions present multiple challenges as well. These include the difficulty of evaluating target firms, cultural and institutional differences, and the liabilities of foreignness among others. We compare acquisitions to enter new markets with other market entry mechanisms (strategic alliances and greenfield ventures), and conclude with suggestions for future research to advance our knowledge of this strategy of increasing importance globally.
The contribution revisits existing research on human impacts on the performance of mergers and acquisitions. Findings are grouped into three categories: individual-…
The contribution revisits existing research on human impacts on the performance of mergers and acquisitions. Findings are grouped into three categories: individual-, organizational- and managerial-related factors. Results show that while research seems various and abounding, influential factors are often studied as static setting approached in isolation, without measuring their direct relation to post-acquisition outcomes.
Corporate history has featured a number of approaches to restructuring, both internal and external to the firm. External restructuring has taken place through a variety of…
Corporate history has featured a number of approaches to restructuring, both internal and external to the firm. External restructuring has taken place through a variety of mechanisms, including mergers, acquisitions, consolidations, divestitures, leveraged buyouts, and spinoffs. Restructuring has been especially prevalent on worldwide basis since the 1980s. In addition to developments in western industrialized economies, the presence of the phenomenon within the world business system has been augmented by the transition of so many previously planned economies to a new market‐based framework.
Different forms of inter-organisational encounters, including joint ventures, alliances, mergers and acquisitions, have over the last decades become fashionable and…
Different forms of inter-organisational encounters, including joint ventures, alliances, mergers and acquisitions, have over the last decades become fashionable and much-sought means of globalisation. A continuous concern shared by managers involved in these different forms of inter-organisational encounters is the challenge of making them work in practice – their successful implementation and management. The cultural dimensions of these different kinds of inter-organisational encounters, particularly in cross-border contexts, have been deplored as being particularly difficult. This paper builds on prior research and aims to understand how the cultural dimensions of inter-organisational encounters have been approached by researchers on mergers and acquisitions on the one hand and researchers on alliances and joint ventures on the other hand. Based on a comparative literature review, the findings suggest that the two fields, despite their valuable contributions and the similarities in the phenomena they study, have remained surprisingly isolated from one another and would offer opportunities for cross-fertilisation. Through its theoretical contribution, the paper intends to offer insights to researchers in both streams of research.
This chapter presents a review of the state of the art on the topic of knowledge transfer following post-merger integration (PMI) in international mergers and acquisitions…
This chapter presents a review of the state of the art on the topic of knowledge transfer following post-merger integration (PMI) in international mergers and acquisitions (M&A) and identifies points of agreement and disagreement, recognizes underexplored areas and provides suggestions on how they could be explored in future studies. The chapter points to the limited amount of literature that describes knowledge transfer following international acquisitions, while highlighting it as an emerging field of research. The knowledge transfer literature mainly refers to innovation and innovation capabilities, while areas such as marketing and customer knowledge are vitally absent in the literature. In any international acquisition, such knowledge transfer would be of fundamental importance, given the acquisition motive to reach new markets or customers. Two case studies on the transfer of knowledge about customers following international acquisitions are provided. The case illustrations point to a focus on knowledge transfer on strategic levels in the post-merger integration following international acquisitions, while the operational sales forces’ transfer of knowledge is largely disregarded in practice. Since much of the tacit knowledge about customers is handled on that level, it needs to be recognized and developed. The chapter indicates that raising the awareness of the transfer of knowledge about customers following international acquisitions is important from a practitioner’s as well as a research point of view.