Pivotal Factors in Cross-border M&As - A study of elements, trends, and strategies employed to ensure success in an international context

Abstract

M&As is a subject often visited upon in business economics literature. In recent years, there has been a noticeable increase in the value and number of cross-border M&As. Challenges are particularly pronounced when companies must navigate substantial cultural, economic, and legal differences. The study takes off in these challenges by answering the research questions, how can organizations lay the foundation for successful integration early on in the M&A process within cross-border transactions, and what role do cultural differences between companies play in the success of cross-border acquisitions, and how can these differences be managed. The purpose of this report is to recognize the pivotal factors during the preparatory phase crucial for a successful integration in cross-border M&As. The theoretical framework for this study is developed from a comprehensive perspective on the M&A process, drawing on widely referenced international business literature. The theoretical framework is designed to offer a basic understanding of mergers and acquisitions, and highlight important issues. The study employed a qualitative methodology with an abductive research approach. Data was gathered from 26 semi-structured interviews involving participants who have experience with both national and international M&A transactions. The responses were compiled and analyzed by coding and informed the study's conclusions. To lay a successful foundation for M&A integration in cross-border transactions, organizations should clearly define the transaction's purpose, focusing on strategic objectives over financial metrics. Rigorous and precise due diligence which avoids exaggeration of synergies are critical to mitigate risks. Simplifying processes while ensuring quality, improves integration outcome and helps to avoid deal fatigue. Additionally, to ensure continuity throughout the whole M&A process, the findings from the preparatory phase should effectively be transferred to the integration team. Further, it is clear that culture plays a crucial role in M & A success. Despite this, many professionals do not take culture into account, or do not approach it in a structured manner.While transparency can be an issue, structured assessments are aided by concrete frameworks. These also make communication of results significantly easier. With fewer transaction problems in countries where the organization is already established, national culture seems to pose a potential obstacle to M&A success.