International mergers and acquisitions in the UK 1985-94: a comparison of national HRM practices

The paper investigates HRM practices adopted by companies from the USA, Japan, Germany and France in UK companies that they have acquired. UK/UK acquisitions are used as a control. The research is based on a survey instrument applied to 201 companies and interviews with forty. It notes that there is some convergence of HRM practices, in that, for example, all countries researched employ performance-related pay and increase the amount of training in their new subsidiaries. It finds, however, that there is a distinct difference in the HRM practices employed by companies from each of the countries, influenced by the characteristic HR practices common to companies in the country of origin of the parent.     

The human resource management issues during an acquisition: the target firm's top management team and key managers

When a company is acquired, the amount of money paid for the company is normally some multiple of earnings. The assumption is that the purchase price is higher than the tangible assets of the company. Therefore, the acquirer believes that there is value in the company beyond the balance sheet of the company. Frequently, some percentage of the ‘premium’ paid by the acquiring company is for the top management team and/or key managers. This paper examines the role of the top management team and their retention on the post acquisition performance of the company.     

Managerial shareholdings, firm value, and acquired corporations

Prior research on the relationship between managerial shareholdings and firm value provides conflicting evidence. We take a different approach to its analysis and focus on managerial shareholdings in acquired firms. We argue that in a relatively unfettered market for corporate control, prior evidence of a nonlinear relationship between moral hazard costs and managerial shareholdings suggests that acquired corporations can be segmented according to managerial shareholdings, and that these segments will differ according to the source of wealth gains, managerial resistance, who acquires the company, and how target shareholders are paid. We find evidence consistent with these predictions.     

Privatization and foreign competition

This paper determines the equilibrium market structure in an international oligopoly, where a state enterprise is sold at an auction. The paper suggests that high greenfield costs and high trade costs do not necessarily induce foreign acquisitions in privatizations, despite the fact that foreign firms would gain considerably from acquiring in such situations. The reason is that domestic firms can then prevent foreign firms from becoming strong local competitors and thus, their willingness to pay for the state assets is high.     

Diversification to mitigate expropriation in the tobacco industry

While it is well established that diversifying acquisitions by large, cash-rich firms destroy shareholder wealth, we document positive abnormal returns to such acquisitions in the tobacco industry. We show that these abnormal returns are associated with proxies for lower expected expropriation costs. Specifically, we show that wealth creation increases in the degree of domestic geographic expansion afforded by the acquisition (increasing tobacco firms’ influence in more political districts) and in the liquidity of tobacco firms’ assets (converting cash to harder-to-expropriate operating assets). We also show that the threat of expropriation constrains payments to shareholders before expropriation becomes certain in 1998.     

Post‐merger strategy and performance: evidence from the US and European banking industries

The banking industry has one of the most active markets for mergers and acquisitions. However, little is known about the type of operational strategies adopted by banking firms in the years following a deal. For a sample of bidding banks in the USA and Europe, this study compares the design and performance implications of different post‐merger strategies in both geographical regions. Using accounting data, we show that European banks pursue a cost‐cutting strategy by increasing efficiency levels vis‐à‐vis non‐merging banks and by cutting back on both labour costs and lending activities. US banks, on the other hand, raise both interest and non‐interest income in the post‐merger period.     

Does acquisition lead to the growth of high-tech scale-ups? Evidence from Europe

The post-acquisition growth of high-tech scaleups has received relatively little research attention. This is surprising since buyers are known to target these firms for growth opportunities whilst sellers increasingly seek strategic partners to access resources to scale their ventures. We examine the post-acquisition revenue and employment growth of high-tech scaleups in a multi-country setting, comprising five European economies. Using a propensity-score matching approach and difference-in-differences regression, for a sample of 2187 high-tech scaleups, we demonstrate that acquisition has a positive effect on target firms equivalent to cumulative growth of revenue (employment) of 9–13 (6−10) percent after five (four) years, relative to control firms. We find that nationality matters such that the targets of foreign-owned acquirers exhibit significantly higher cumulative revenue and employment growth than their domestic counterparts. Taking a longer-term perspective, we show that growth dips in the first year, then stabilizes and accelerates in the years following acquisition, indicating a period of adjustment.     

The Effect of Cross‐Border Mergers and Acquisitions on Earnings Quality: Evidence from China

Despite the fruitful research on the motives and outcomes of cross‐border mergers and acquisitions (M&As) of Chinese multinational corporations (MNCs), there has been scant research on the impact of cross‐border M&As on corporate governance. In this article, we fill the research gap by exploring whether cross‐border M&As may lead to an improvement in corporate governance of Chinese acquirers. In particular, we examine the impact of cross‐border M&As on earnings quality of Chinese MNCs. We find that the acquisition of a target firm from a developed country leads to a significant improvement on the acquirer's earnings quality. In comparison, the acquisition of a target from an emerging market does not have such an impact. Our results are robust to various corporate governance measures, alternative econometric methods, and controls of relevant firm characteristics and macroeconomic variables. Finally, we show that the effect of cross‐border M&As on earnings quality is more pronounced in non‐state‐owned enterprises (non‐SOEs) that have conducted large M&A deals. Our article offers new insight to the international business literature on latecomer perspective and liability of foreignness. © 2016 Wiley Periodicals, Inc.     

Beyond merger syndrome and cultural differences: New avenues for research on the “human side” of global mergers and acquisitions (M&As)

This paper focuses on research on the “human side” of global mergers and acquisitions (M&As). We argue that there is a need for a more fine-grained understanding of the “human side,” which requires conceptualizing M&As as practice-oriented processes. Drawing on the practice approach, we outline avenues for further research on the “human side” of global M&As. The research directions include (1) multilayered identity dynamics, (2) emotional processes, (3) participation and change agency, (4) resistance, (5) human resource management (HRM) practices and tools, and (6) new forms of communication.     

Alliances,Acquisitions and Multinational Advantage

This paper reviews recent empirical evidence to assess the implications of alliance formation and increasing merger and acquisition activity of multinationals in the context of the eclectic paradigm. Specifically, the paper will concentrate on the performance implications of international expansion via alliances and mergers, and their relationship to the so-called asset-augmenting foreign direct investment. It has been argued in the literature that the way in which multinationals are able to build on their existing advantages and to add to them by virtue of their international activities confers specific benefits to multinationality. We argue that the growth of cross-border acquisitions and alliances as modalities for international expansion has resulted from the continuing convergence of value-adding capabilities within the Triad, and while such activity can help to augment the asset base of the investing firms, it also has potentially anti-competitive implications.