Exercises in the Strategy of Post-Merger Integration

2017 ◽  
pp. 1-7
Author(s):  
Robert F. Bruner ◽  
Chad Rynbrandt
Keyword(s):  
British Petroleum ◽  
Target Firm ◽  
Integration Strategy ◽  
Union Pacific ◽  
Target Company ◽  
America Online ◽  
Post Merger Integration ◽  
Time Warner ◽  
Merger Integration ◽  
Strategic Motives

This case recounts the announced terms of five prominent acquisitions of the late 1990s, and asks the student to suggest a preliminary strategy for integrating the target firm into the buyer. The five acquisitions are America Online/Time Warner, British Petroleum/Amoco, Daimler-Benz/Chrysler, Union Pacific/Southern Pacific, and Warner-Lambert/Agouron Pharmaceuticals. The objectives of the case are: 1) to highlight the linkage of the post-merger integration approach with the strategic motives for the acquisition; 2) to consider the range of possible challenges to successful post-merger integration; 3) to explore the varieties of integration strategy, especially surrounding decisions about autonomy of the target company within the buyer, importance of interdependence between the buyer and target, and need for speed of integration.

A paradoxical approach symbiotic to postmerger integration: a French longitudinal case study

2019 ◽  
Vol 31 (2) ◽  
pp. 232-259
Author(s):  
Anne-Sophie Thelisson ◽  
Audrey Missonier ◽  
Gilles Guieu ◽  
Lotte S. Luscher
Keyword(s):  
Process Model ◽  
Dynamic Decision Making ◽  
Longitudinal Case Study ◽  
Target Firm ◽  
Content Type ◽  
Organizational Autonomy ◽  
Merger Process ◽  
Inclusive Approach ◽  
Post Merger Integration ◽  
Merger Integration

Purpose This paper aims to examine post-merger integration (PMI) through the lens of paradox to determine how paradoxes contribute to successful integration. Although PMI has been identified as crucial to understand merger success or failure, the literature on PMI drivers remains inconclusive. Design/methodology/approach Drawing on the theory of paradox and two key elements of PMI, strategic interdependency (SI) and organizational autonomy (OA), the authors describe the merger of two listed French companies using longitudinal data. Findings The authors identify how the paradox between OA and SI was triggered and fostered PMI success by leading to symbiotic integration. They also show that two capabilities were central in helping the paradox to evolve: preserving the specificities of the organizations and pooling their respective capabilities. These capabilities result from basic decisions and actions during the integration implementation, such as highlighting the expertise of the target firm, refocusing the core activity while valorizing each company’s expertise, clarifying the identity of the new organization on the market and enhancing joint piloting and transferring both general management capacity and functional abilities during the reorganization period. Practical implications The authors offer several useful insights for managers trying to manage paradoxical tension throughout the merger process. This study encourages managers to embrace inconsistencies as they make decisions and to shift to dynamic decision-making as a way to adapt to complex contexts. Originality/value This study adopts a global and inclusive approach to focus on OA and SI and flesh out a picture of the integration process. It proposes a dynamic process model to conceptualize the stage-wise nature of the PMI process by highlighting the interrelations between OA and SI dynamics.

Segmentally aware: know when to merge and when to purge

2019 ◽  
Vol 33 (1) ◽  
pp. 196-214
Author(s):  
Yao Ma ◽  
Jiahua Xu
Keyword(s):  
Mergers And Acquisitions ◽  
Financial Performance ◽  
Design Methodology ◽  
Content Type ◽  
Structural Integration ◽  
Target Company ◽  
Overall Performance ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Integration Levels

Purpose The purpose of this paper is to hone in on the degree of segment-level integration relative to corporate post-merger performance. Design/methodology/approach The sample consists of 89 segments in 29 combined companies resulting from large mergers and acquisitions (M&A) transactions between 2001 and 2014 in the pharmaceutical and chemical industries worldwide. The authors track the change through M&A in performance of segments with different integration forms as well as performance of entire companies with different integration levels. Findings The authors find that integrating the segments from the target significantly improves the acquirer’s overall performance, as well as the concerned segments’ performance, following an M&A transaction. Whereas the segments from the target company, when left unintegrated, not only exhibit subpar performance among all the segments, but also appear responsible for the worsening corporate performance. Various possible reasons for this contrast are discussed. Originality/value This paper raises awareness of the significance of segment-level analyses, and contributes to the post-merger integration (PMI) research by examining the influence of structural integration on operating segments. To the best of our knowledge, this paper is the first to investigate integration forms and the post-merger financial performance of various segments within companies.

Can Post-Merger Integration Costs and Synergy Delays Explain Leverage Dynamics of Mergers?

2019 ◽  
Vol 09 (04) ◽  
pp. 1950012
Author(s):  
Sergey Tsyplakov
Keyword(s):  
Capital Structure ◽  
Empirical Evidence ◽  
Integration Process ◽  
Target Firm ◽  
Acquiring Firms ◽  
Integration Period ◽  
Post Merger Integration ◽  
Financing Behavior ◽  
Merger Integration ◽  
Leverage Dynamics

The integration of two merging firms takes time to complete, and synergy gains from a merger can be captured only after the firms go through a costly and often lengthy post-merger integration period. This paper presents a dynamic model of capital structure for the target firm and the acquirer to examine the effects of the integration period on acquiring firms’ financing behavior around mergers. The model generates predictions that provide rational (non-behavioral) explanations for documented empirical evidence regarding leverage dynamics around mergers. When anticipating a longer and costlier integration period, acquiring firms strategically plan ahead by choosing a lower leverage prior to and at the time of the merger, and gradually lever up as the post-merger integration process nears completion. Deals with longer integration periods are financed with a larger fraction of equity. The model also implies that acquiring firms optimally time takeovers of underleveraged firms that experience negative shocks to their earnings.

Post-Merger-Integration

2004 ◽  
Vol 99 (5) ◽  
pp. 239-242
Author(s):  
Eberhard Abele ◽  
Jens Elzenheimer ◽  
Markus Bundschuh
Keyword(s):  
Post Merger Integration ◽  
Merger Integration

Post Merger Integration

2014 ◽  
Author(s):  
Johannes Gerds ◽  
Gerhard Schewe
Keyword(s):  
Post Merger Integration ◽  
Merger Integration

scholarly journals Post-merger Integration Approaches: Case Analysis of the One. Vip Macedonia Merger

2017 ◽  
Vol 8 (2) ◽  
pp. 228
Author(s):  
Dusica Stevcevska Srbinoska ◽  
Edi Smokvarski
Keyword(s):  
Work Force ◽  
Proper Selection ◽  
Multiple Factors ◽  
Literature Overview ◽  
Integration Approach ◽  
The Republic ◽  
Post Merger Integration ◽  
The One ◽  
Operational Excellence ◽  
Merger Integration

Selecting the best integration approach is a meticulous and sensitive process that can mold the completion of the merger and/or acquisition transaction. In this paper, I discuss that implementing the proper integration approach leads to mitigating or increasing impending risks when going into major company restructuring events. If proper selection and execution takes place, and all related processes and expectations of the parties involved are duly taken into account, successful post-merger integration can be concluded in the Republic of Macedonia in spite of numerous difficulties. One of the greatest risk factors certainly lies in the satisfaction or dissatisfaction of the work force which is of vital meaning for the operational excellence of every entity. Three different integration approaches - absorption, symbiosis, and preservation - are observed through literature overview and particular transactions. Additionally, I study the example of the integration approach adopted by one. Vip doo Skopje following the merger of Vip operator dooel Skopje and ONE in 2015, accentuating that multiple factors can increase or deteriorate the chances of integration success.

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