Antecedents of M&A success: The role of strategic complementarity, cultural fit, and degree and speed of integration

Abstract

In this paper, we develop a comprehensive model of M&A success. We integrate fundamental constructs of different schools and discuss their interdependencies with M&A success. Our theoretical framework was tested empirically across a sample of 106 SME transactions in the machinery, electronic, and logistic industries in the German‐speaking part of Central Europe. The results of our study support the demand for an integrative perspective and theory on M&A. M&A success is a function of strategic complementarity, cultural fit, and the degree of integration. Strategic complementarity also positively influences cultural fit and the degree of integration. Cultural fit positively influences M&A success, but surprisingly has a negative impact on the speed and degree of integration. The degree of integration is positively related to speed of integration. Copyright © 2013 John Wiley & Sons, Ltd.

Getting post-M&A integration mechanisms tuned in to technological relatedness and innovation synergy realisation

“…Here, strategic issues in M&As are typically related to context variables, and defined as general attributes of the acquiring company, of the target, or their relative positions, that may affect the value creation potential in a transaction (Gerpott 1995). Examples of such strategic characteristics are technological and market relatedness, M&A experience, cultural fit, absolute and relative size of the M&A, and strategic motives for the M&A (Haspeslagh and Jemison 1991;Ahuja and Katila 2001;Hagedoorn and Duysters 2002;Cassiman et al 2005;Schweizer 2005;Cloodt, Hagedoorn, and van Kranenburg 2006;Hitt et al 2009;Hussinger 2010;Makri, Hitt, and Lane 2010;Muehlfeld, Sahib, and van Witteloostuijn 2012;Bauer and Matzler 2014). Superior strategic choices regarding these characteristics create an attractive combination potential.…”

“…Mergers and Acquisitions (M&As) are an important means of improving the innovativeness of organisations (Chakrabarti, Hauschildt, and Suverkrup 1994;Breitzman, Thomas, and Cheney 2002;Graebner 2004) although our understanding is limited when it comes to achieving innovation synergies (Hutzschenreuter, Kleindienst, and Schmitt 2012;Zaheer, Castener, and Souter 2013;Bauer and Matzler 2014;Sabidussi et al 2014). While M&As may create a potentially attractive combination (Larsson and Finkelstein 1999) to raise the innovation performance of companies (Ahuja and Katila 2001;Prabhu, Chandy, and Ellis 2005;Cloodt, Hagedoorn, and van Kranenburg 2006;Hussinger 2010), critical for realising the potential innovation synergies is the quality of the post-M&A integration (PMAI) (Haspeslagh and Jemison 1991;Ranft and Lord 2002;Epstein 2004;Grimpe 2007).…”

“…In PMAI-related literature we recognise two, non-exclusive streams of research, one essentially focused on strategic fit characteristics that determine the (innovation) combination potential of M&As; the other stream focused on the process of M&A integration impacting (innovation) performance (Bauer and Matzler 2014). Research in the first stream explores the consequences of antecedents for M&A outcomes (Haleblian et al 2009) Authors take resource complements, knowledge similarity, technological relatedness, cultural, and/or organisational (mis-) fit as indicators of the combination potential of an M&A, with performance implications on accounting and stock-market valuation in general, and patents in particular (Datta, Pinches, and Narayanan 1992;Ahuja and Katila 2001;Prabhu, Chandy, and Ellis 2005;King, Slotegraaf, and Kesner 2008;Stahl and Voigt 2008;Makri, Hitt, and Lane 2010;Malik 2011;Hussinger 2012;Bauer and Matzler 2014).…”

“…Research in the first stream explores the consequences of antecedents for M&A outcomes (Haleblian et al 2009) Authors take resource complements, knowledge similarity, technological relatedness, cultural, and/or organisational (mis-) fit as indicators of the combination potential of an M&A, with performance implications on accounting and stock-market valuation in general, and patents in particular (Datta, Pinches, and Narayanan 1992;Ahuja and Katila 2001;Prabhu, Chandy, and Ellis 2005;King, Slotegraaf, and Kesner 2008;Stahl and Voigt 2008;Makri, Hitt, and Lane 2010;Malik 2011;Hussinger 2012;Bauer and Matzler 2014). However, such research typically considers PMAI as a black box, disregarding intermediate variables and relevant learnings on integration strategies, and frequently oversimplifies performance (Haleblian et al 2009), let alone innovation performance, to allow for quantitative analysis (Ahuja and Katila 2001;Cloodt, Hagedoorn, and van Kranenburg 2006;Keil et al 2008).…”

“…Publications that try to bring the stated two streams of research together typically do not investigate broadly the different antecedents (Colombo and Rabbiosi 2014), or neglect (various types of) innovation performance (Bauer and Matzler 2014). As a consequence, it is the aim of the study to more fully grasp the underlying structures that explain M&A-induced innovation synergies, by developing a conceptual framework on innovation synergy realisation, that relates the following three components: (1) various M&A innovation synergies, (2) strategic M&A characteristics; and (3) PMAI mechanisms.…”