Factors influencing post merger integration success in South Africa

Date
2012-11-14
Authors
Deliwe, Chwayita
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Abstract
Mergers and acquisitions (M&A) have become very popular in recent decades as a means to achieve growth and to maximise profits in companies. However, research shows that over half the M&As do not meet the intended purpose, and this is due to, amongst other reasons, post-merger integration failure. In fact previous studies have shown that the post-merger integration phase encompasses the highest risk behind the whole merger. This research aims to identify the key determinants of achieving successful post-merger integrations in South African companies. Previous studies on M&As have generally examined the success of the M&A as a whole, whereas this study focuses specifically on post-merger integration success. The data was collected through surveys. Companies that have gone through a merger or an acquisition were used in the data collection. An online survey was sent to respondents asking them to rank factors identified in the literature review in terms of importance. In two of the questions the respondents were asked to comment in a descriptive format, resulting in two new factors being identified. The research showed that strategy, due diligence, communication and socio-cultural issues like human resources are the most important factors for achieving post-merger integration success. Employees and customers were considered to be core resources of the business and therefore it was extremely important to invest in, and ensure, their satisfaction following the M&A as, without them, no business would exist. Culture was found to be the one of the most difficult factors to integrate and professional assistance from experts was often required to assist in achieving a successful culture integration.
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MBA thesis - WBS
Keywords
Integration of companies, Mergers, Mergers and acquisitions, Culture, Company culture
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