Search results

Special purpose acquisition companies (SPACs) are created by a group of specialists to pool funds for financing future acquisitions within a specified time limit. SPACs are basically “shell” companies with no operations and business, assets or liabilities but they acquire the status of public corporations through initial public offerings (IPOs). The SPAC founders use the IPO funds to acquire a potential target. They are generally found to be successful to close an mergers & acquisitions (M&A) deal but they may not bother to ensure perpetual success of the acquired entity for a long time. In many countries, “shell” companies are characterized as the “bad boys” of the corporate world but they can be used for long-lasting successful M&As due to their inherent strengths, if they play the role of protagonists and “good guys” as SPACs. This chapter examines how SPACs can be used as special vehicles to ensure worthy and successful acquisitions to create sustainable corporations.

The purpose of this paper is to shed lights on both economic and social impacts associated to the increasing amount of western companies acquired by multinationals from emerging countries. Focussing on the Italian context, its main intent is to analyze changes in targets’ performance and capability to contribute to stakeholders’ wealth to assess the business and social viability of this type of deal.

Operations of mergers and acquisitions (M & As) were identified through Zephyr (Bureau VanDijk’s database). Only acquisitions of a controlling interest were considered for a total of eight case studies. Financial Statements and Management Reports over a eight-year period have been analyzed to understand the rationale of the deal and to assess financial performance and company social impact before and after the merger.

Results suggest that foreign investors mainly search for know-how and technical expertise and their arrival does not lead to better financial performance. Only one target records profits. Four companies are still controlled by Indian investors while the other four have been dismissed. Nevertheless Indian investors are not destroying profitable organizations as these were recording negative results already before the merger. With reference to value added distribution, acquisitions do not reduce local stakeholders’ wealth for the benefits of shareholders. Jobs are preserved and valued added is mainly distributed to employees. Great difficulties in achieving the expected value resulting from synergies emerge.

Observations emerging from this explorative study are limited to the case studies analyzed while it could be important to enlarge the number of companies to investigate, including targets acquired by Russian, Chinese and Brazilian investors. Moreover, additional information could be obtained from interviews with top managers to reveal how they interpret the merger’s success or failure. Also interviews with local stakeholders like suppliers, clients, representatives of employees and local institutions could be of great importance as they can help identify their specific point of view about the social and economic impact of foreign investors’ arrival.

With reference to the public debate on the increasing number of European companies sold to foreign investors, research findings indicate that FDI from emerging economies do not necessarily lead to job losses or target’s closure. Indian investors are interested in brand, knowledge and other intangible assets (like Chinese ones). However they do not relocate production or expertise abroad. Some target companies record higher investments financed by the new shareholder, indicating that the arrival of new investors owing a large amount of money to invest in financial distressed Italian companies, can be beneficial to the local economy.

Most literature studies M & As from the buyer’s perspective to assess if shareholders’ value is created (Tuch and O’Sullivan, 2007; Meglio, 2009; Dauber, 2012). On the contrary this research adopts the target’s and stakeholders’ perspective, in order to measure the value created and distributed to the territory. Moreover it focuses on unlisted companies, while most studies deal with publicly traded companies (Meglio and Risberg, 2010; Meglio and Risberg, 2012b). Lastly it enriches M & A mainstream literature, which usually adopts a positivistic mindset and rely on statistical analysis, by adopting a qualitative approach based on case study analysis.

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).

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.

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.

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

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.

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.

Mergers and acquisitions (M&As) are major corporate changes and are among the most stressful for employees. Employee resistance is a well-recognised reason for high failure rates of post-merger integration (PMI). The contemporary concept of psychological capital (PsyCap) is a promising approach for dealing with the issue. To date, relatively little research has been conducted on the relationship between PsyCap and resistance. The purpose of this paper is to examine the possible positive impacts of PsyCap on employee resistance during PMI, based on a review of the existing literature and selected interviewers with a panel of experts, and offer a theoretical model for decreasing the resistance.

This paper builds on the literature on M&A, PMI, and employee resistance by focusing on the contribution of PsyCap. Apart from formulating propositions and answering pre-determined research questions, the findings are the basis for a theoretical model that was validated by a panel of experts.

This research documents the negative emotions that are triggers for resistance during PMI under the influence of PsyCap. By measuring and assessing the PsyCap needs of employees, resistant employees were revealed, and their PsyCap was developed using tailored interventions. The research findings indicate this to be a feasible approach for reducing resistance during PMI.

All of the findings rely on empirical testing and operationalisation. Cultural differences may influence the PsyCap dimensions.

M&A deals often fail due to unsuccessful PMI implementation because leaders fail to consider the psychological impacts when trying to overcome resistance. The model proposes a possible solution.

The offered theoretical approach is original and provides new insights for researchers and practitioners who evaluate M&A strategies.

The purpose of this paper is to examine the possible coexistence of single and multiple organizational identities (OIs) after mergers and acquisitions (M&A). In particular, it describes how the sensemaking process leads the acquired and acquiring companies to maintain multiple identities, even after the formal conclusion of the integration process.

The paper presents a grounded study based on a single case study (M&A between a German chemical multinational and an Italian/Swiss pharmaceutical firm).

While many previous studies suggest that the evolution of OI reduces ambiguity by providing multiple identities under a shared commonality, this paper shows that multiple identities might survive within the same “new entity.”

Despite being based on a single case, the paper argues that the choice of maintaining multiple identities may be even more appropriate than the tendency to converge toward one of the old ones or toward a new one. The “sense” that employees and managers give to the same “words,” as well as the “sense” that they make for them, mirrors the perception they have of the OI.

The conclusions presented could help managers to facilitate sensemaking as a means of dealing with multiple OIs.

Differently from the extant literature, the paper concludes by stating that striking a balance between single and multiple identities might provide the ideal platform for building a new identity based on plurality. When the two (or more) organizational contexts present some complementarities, the existence of multiple identities, and its inner ambiguity, is not a problem per se.

This paper signals departure from a theoretical perspective on organizational culture in mergers and acquisitions based on a binary opposition between coherence and pluralism. The paper aims to outline another, dialogic perspective on cultural transformations in mergers and acquisitions, based on an assumption that individuals occupy temporary positions in dynamic dialogue, negotiating equally transitory, but temporarily cohesive allegiances.

The dialogic perspective derives from a constructionist approach and involves ethnographic research methodology. It is developed to track the complex contests of interests in post‐merger pluralist cultures and to reconstruct their dynamics. While some events in the merger process contribute to cultural pluralism and contest of interest, others appear to render allegiance to cohesive cultural elements seductively appropriable.

Two situations are presented. The first poses a view of culture during mergers in which contest over meaning is central and whereby the representation of a cohesive organizational culture is appropriated for political purposes. The second situation illustrates cross‐cutting cultures in action, presenting the development of a “working culture” a notion based on flitting cross‐organizational allegiances in the interest of confronting a central team.

The paper contributes to critical work on organizational culture in merger integration. It points to the inseparability of binaries, the limits of cultural attribution and the tension instigated by the conflation of culture's “differences”. In closing, it points to a future direction with a relational emphasis to merger integration.

Given that several publicly announced international merger and acquisition deals have been abandoned in recent years, the purpose of this paper is to present a synthesis of influential articles that examine organizational characteristics of cross-border acquisition transactions. The synthesis is framed through general traits and resources, learning and prior acquisition experience, and top-level management and governance attributes. Specifically, the paper conceptualizes key organizational attributes influencing the propensity of cross-border negotiations, and the most common characteristics and post-deal effects by illustrating several case examples from around the world.

Owing to fairness and integrity principles of the literature survey studies, the paper adopts an exploratory review design to present a synthesis of several influential articles published in strategy, international business and corporate finance journals. Since case method and storytelling are the best qualitative approaches to conceptualizing extant theoretical contributions, a number of case examples—successful, delayed and abandoned—from around the world have been discussed by leveraging the case information from archival sources.

Drawing on resource-based view, organizational learning, upper echelons and agency theory perspectives, the paper underscores three observations. First, organizational characteristics such as firm age, firm size, ownership structure, slack resources, marketing resources, technological intensity, export intensity and business group affiliation have different impacts on the propensity of publicly announced cross-border deals. Second, firm’s prior acquisition experience and firm’s acquisition experience in the target country have positive or moderating effects on the success of a cross-border merger. Third, top-level management characteristics such as CEO foreign nationality and CEO international career experience, and governance characteristics such as board size, the number of independent directors and directors with overseas experience, have mixed effects on the incidence of cross-border acquisitions.

The paper puts forth several recommendations for top-level managers participating in cross-border acquisition negotiations, such as learning from peers in the same industry, learning from predecessors in the target country and learning from failure negotiations in the same industry and other industries.

Nested within the organizational, international business strategy and corporate finance literature, the paper presents a synthesis of influential publications that study organizational characteristics affecting the propensity of cross-border acquisitions. The cases discussed in this paper are unique examples from around the world.

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.

In cross-border mergers and acquisitions (M&As), acquirers often fail to achieve the expectations they held when they made the M&A deals. This paper aims to propose that the risks of cross-border M&As can be mitigated by building and cultivating organizational resilience as a prime means of risk management.

The research examines risks associated with cross-border M&A and how such risks can be mitigated by developing resilience. It presents dual cases of acquisitions of the biggest branded mobile phone manufacturer in Taiwan.

The authors find that the acquirer faces multiple risks in cross-border M&A transactions, including financial, strategic and organizational, and process risks that arise from misalignment between the goal of the M&As and the post-acquisition performance of the target firms.

The research provides theoretical insights on organizational resilience and how it can mitigate the specific risks involved in cross-border M&As, thereby developing coherent organizational resilience processes.

Written partially in response to a previous paper published in this Journal suggesting that leadership and leaders are categorised as ‘transformational’ or ‘transactional’, the author suggests that these definitions are too narrow to be reflective of reality. It is instead argued that true and effective leaders operate in a multidimensional framework that combines styles, skills, attributes and abilities that fall within what we commonly refer to as management and leadership. It is suggested that there is a need to move on and to accept that there is not an all‐encompassing model, definition or style of leadership.