scholarly journals M&A successes: Breadth, depth, and deal completion time in the US semiconductor industry

2021 ◽  
pp. 234094442199805
Author(s):  
Taewoo Roh ◽  
Jieun Hwang ◽  
Byung IL Park
Keyword(s):  
Mergers And Acquisitions ◽  
Technological Innovation ◽  
Completion Time ◽  
Semiconductor Industry ◽  
Jel Classification ◽  
Integration Process ◽  
The Us ◽  
Post Merger Integration ◽  
Deal Completion ◽  
Merger Integration

Most previous studies examining M&As (mergers and acquisitions) have focused on the post-merger integration process. While there have been studies that have partially investigated the importance of deal completion, we argue that firms could learn to increase their deal completions by leveraging their experience from prior successful acquisitions and that their cumulative success could reduce the deal completion time; that is, the time from the announcement of the deal to its resolution. To address this unexplored issue about M&As, we investigated whether prior intra- and/or inter-industry acquisition experiences helped accelerate subsequent focal acquisitions in the semiconductor industry, which is characterized by rapid technological innovation. We tested our hypotheses on data consisting of 323 acquisition deals in the US semiconductor industry between 2000 and 2013. The results showed that both prior intra- and inter-industry acquisition experiences significantly reduced deal completion time. JEL CLASSIFICATION M10

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.

The Integration Journey: An Attention-Based View of the Merger and Acquisition Integration Process

2005 ◽  
Vol 26 (10) ◽  
pp. 1501-1528 ◽  
Author(s):  
Jisun Yu ◽  
Rhonda M. Engleman ◽  
Andrew H. Van de Ven
Keyword(s):  
Healthcare System ◽  
Merger And Acquisition ◽  
Ethnographic Study ◽  
Vicious Cycle ◽  
Integration Process ◽  
Senior Managers ◽  
Acquisition Integration ◽  
Post Merger Integration ◽  
Merger Integration

This paper reports findings from an eight-year ethnographic study of the integration process in a large healthcare system formed in a 1994 merger. We examine the post-merger integration process by analyzing the relative amounts of time that senior managers in one unit of this organization spent discussing various integration topics and issues in their bi-weekly meetings from 1995 to 2002. We also describe the different patterns observed when managers addressed topics in their meetings related to internal unit integration versus integration with other parts of the organization. Finally, we identify a vicious cycle of repeated conflicts in how organizational members made sense of issues that emerged during the post-merger integration journey.

scholarly journals Impact of managerial communication, managerial support, and organizational culture difference on turnover intention: A tale of two merged banks

2020 ◽  
Vol 18 (4) ◽  
pp. 376-387
Author(s):  
Myra V. De Leon
Keyword(s):  
Organizational Culture ◽  
Mergers And Acquisitions ◽  
Turnover Intention ◽  
The Philippines ◽  
Demographic Profile ◽  
Managerial Communication ◽  
Managerial Support ◽  
Culture Difference ◽  
Post Merger Integration ◽  
Merger Integration

Mergers and acquisitions are critical mechanisms for promoting the stable and effective production of the financial sector, and an effort to improve the strategic edge of financial institutions. M&A process also entails a high degree of confusion, which can be difficult for the workers. This study was conducted in the Philippines to examine the differences in the employees’ opinion in managerial communication, managerial support, and organizational culture difference relative to employee turnover. It also seeks to determine if the socio-demographic profile of respondents has a significant influence on turnover intention. The sample in this study is determined using a purposive sampling method. A total of 350 questionnaires are complete and feasible to analyze where 250 respondents belong to Bank A, and 100 respondents belong to Bank B. Using Levene-Welch post-hoc multiple comparison and binary logit regression with bootstrap, the findings revealed that managerial communication, managerial support, and organizational culture were associated with turnover intention. Further, the findings revealed that turnover intention differs per demographic profile. Therefore, management is to develop a post-merger integration plan, ensuring to attain competitive advantage and successful mergers and acquisitions.

scholarly journals The Role of Occupational Identification During Post-Merger Integration

2016 ◽  
Vol 43 (2) ◽  
pp. 207-244 ◽  
Author(s):  
David P. Kroon ◽  
Niels G. Noorderhaven
Keyword(s):  
Organizational Identification ◽  
Survey Design ◽  
Qualitative Interviews ◽  
Future Research ◽  
Integration Process ◽  
Future Research Directions ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Positive Effect

Integration processes after mergers are fraught with difficulties, and constitute a main cause of merger failure. This study focuses on the human aspect of post-merger integration, and in particular, on the role of occupational identification. We theorize and empirically demonstrate by means of a survey design that employees’ identification with their occupation is positively related to their willingness to cooperate in the post-merger integration process, over and above the effect of organization members’ organizational identification. This positive effect of occupational identification is stronger for uniformed personnel but attenuates in the course of the integration process. Qualitative interviews further explore and interpret the results from our statistical analysis. Together, these findings have important practical implications and suggest future research directions.

scholarly journals Making Acquisitions Work: Problems of Organizational Integration

2011 ◽  
Vol 4 (1) ◽  
pp. 150
Author(s):  
Alex F. De Noble ◽  
Loren T. Gustafson ◽  
Michael Hergert
Keyword(s):  
Mergers And Acquisitions ◽  
Poor Performance ◽  
The United States ◽  
Academic Community ◽  
Management Process ◽  
Track Record ◽  
Level Of Activity ◽  
Organizational Integration ◽  
Post Merger Integration ◽  
Merger Integration

The United States is in the midst of the greatest merger and acquisition boom of all time. Despite the intense level of activity, the track record for mergers and acquisitions is poor. Recent research from the academic community suggests that the problems of integrating separate firms into a single entity may be responsible for this poor performance. The purpose of this article is to apply a conceptual framework of post-merger integration to a recent merger and to investigate the implications for improving the merger management process.

scholarly journals Empirical research on mergers’ leverage dynamics and post-merger integration duration

2019 ◽  
Vol 45 (10/11) ◽  
pp. 1488-1507
Author(s):  
Yao Cheng
Keyword(s):  
Capital Structure ◽  
Integration Process ◽  
Content Type ◽  
Acquiring Firms ◽  
Integration Period ◽  
Target Firms ◽  
Empirical Tests ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Leverage Dynamics

Purpose The purpose of this paper is to examine the effects of the post-merger integration duration on acquiring firms’ leverage behavior before and after a merger, using a dynamic model in which full merger benefits cannot be consumed at the instant of a merger, but rather after a pre-specified post-merger integration period. Design/methodology/approach This paper presents a dynamic model and empirical tests that describe the impact of the post-merger integration period on the capital structure dynamics of the acquiring and target firms prior to a merger and during the post-merger integration period. By incorporating costs associated with the post-merger integration period, the model can provide new implications for the leverage behavior around the merger. Findings Empirical tests support the model implications by showing that the longer the expected post-merger integration process, the less likely the acquirer will structure the financing of the combined firm in a manner that increases firm leverage. Since integration takes time to complete, an acquirer tends to retain financial flexibility during the integration process by assuming lower levels of debt when determining the capital structure of the merged entity. Originality/value The model generates new implications related to acquiring firms’ leverage dynamics along with the method of payment choice. The analysis of the duration of the post-merger integration period extends both the theoretical and empirical literature that tacitly assumes that the merger-related synergy is realized immediately at the merger date. This is the first model in the literature that assumes that both the acquiring and the target firms can change their capital structure overtime, which allows us to analyze both the financing structure and the merger timing. Previous empirical studies also ignore the integration period in the analysis of the method of payment choice and leverage behavior around mergers. The model in this paper can be extended along a number of dimensions.

How post-merger integration duration affects merger outcomes

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joon-Hee Oh ◽  
Wesley J. Johnston
Keyword(s):  
Experimental Research ◽  
Organizational Support ◽  
Cost Effective ◽  
Integration Process ◽  
Content Type ◽  
Effective Expansion ◽  
New Finding ◽  
Cost Efficient ◽  
Post Merger Integration ◽  
Merger Integration

Purpose This study aims to confirm earlier findings that differences between merger and acquisition (M&A) participant firms are a hurdle for successful mergers and shows that merger outcomes can also be affected by the post-merger integration duration (PMID). Design/methodology/approach Experimental research on distinct cultures developed within experimental pre-merger subject groups is used to compare pre- and post-integration performances. Findings This study finds that firm distance (i.e. inherent differences between pre-merger firms) negatively influences merger success; no significant relationship between firm distance and PMID exists and PMID is positively related to merger success. Specifically, a slower integration minimizes conflicts between merger partners, enhances trust-building and reduces the disruption of existing resources and processes in both firms, which may benefit M&As. By contrast, a fast integration that shortens the overall integration process may discourage the combined entity from recognizing the intended synergy quickly. Research limitations/implications The new finding that PMID can affect merger outcomes invites empirical validation. This study presents experimental evidence that prolonged, well-structured post-merger integration may compensate for the negative time-variant issues associated with PMID. Practical implications Organizational support for collaborative learning between professional members should be a strategic consideration for firms so that acquiring business capabilities can be more natural and cost-efficient than building internal capabilities despite possibly slowing down the integration process. Encouraging a transfer of technical and client knowledge between the combined members can create value and understand differences in both the form and content of each firm’s knowledge base and the pre-existing mechanisms for sharing knowledge. It may lower the level of resistance in knowledge transfer. Originality/value While M&As may better facilitate the cost-effective expansion of business offerings than building capabilities internally, they can require considerable time, preventing many firms from realizing their intended outcomes. Nevertheless, less attention has been focused on PMID and its influence on M&As. This study is the first to use experimental research to examine the effects of PMID on merger success.

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