Doctoral defense Trang Doan

Title
Studies on the M&A pre-integration process.  Organizational learning, strategy and timing.

Promotors
Prof. dr. Arjen van Witteloostuijn, University of Antwerp
Dr. Padma Rao Sahib, University of Groningen

Date
May 26th, 2015 at 5 p.m., University of Antwerp, City Campus, Promotiezaal Grauwzusters, Lange Sint-Annastraat 7, 2000 Antwerp

Abstract
This dissertation focuses on M&A activities before their official integration (the M&A pre-integration process) and particularly whether an announced M&A deal can be completed. Failing to consummate an M&A deal can generate considerable losses to firms and managers involved in the deal, which include both financial costs and reputation damages. Moreover, many factors that determine M&A completion are also crucial to firm performance after the integration. Therefore, further studies on M&A completion and the pre-integration process will not only extend and deepen current understandings of M&As but can also build a bridge that connects different stages and decisions in the whole M&A process.

With these motivations, this dissertation aims to provide a more in-depth understanding of M&A completion by answering the question: “How can firms and managers increase the likelihood that their M&A transactions are completed?” We first conduct a content analysis in combination with a review on prior literature to figure out the main obstacles that challenge managers and firms in completing an M&A deal (first study). Then, we explore how firms can overcome these challenges with the support of an appropriate timing strategy in a merger wave (first study) and a strong acquisition deal-making capability developed through learning from past experience (second and third studies).

Empirical evidence from our studies reveals that the later firm acquires in a wave, the more difficult and also longer it takes to complete the transaction. In addition, firms can learn from both prior acquisitions and divestitures to complete their deals. Moreover, the learning impact of divestiture experience is even larger than that of acquisition experience in this pre-integration process. Last, learning to make acquisitions from prior acquisitions and divestitures depends on several contextual factors: (1) firms learn better from divestitures if they already have some experience on acquisitions; (2) knowledge from divestiture experience is also more beneficial in larger transactions compared to smaller ones; (3) firms learn differently from the two types of experience when they move along a merger wave.