The role of culture in the merger and acquisitions process: evidence from the European chemical industry

Purpose – The cultural element in M&As' integration process has been identified as one of the key issues that may help explain the failure of many mergers and acquisitions. Yet what needs to be done to improve cultural integration in order to enhance M&As' success has received relatively little attention. This study attempts to examine the role played by culture and provide a framework for enhancing the success of mergers and acquisitions. Design/methodology/approach – This study is based on 32 interviews with senior managers of 16 merger and acquisition deals in the chemical industry. Findings – The study finds that culture differences between the merging firms are a key element affecting effectiveness of the integration process and consequently the success of M&As. Furthermore, the study finds that, although managers agree that cultural differences create organisational challenges, yet the attention given to cultural integration issues during M&As are at best tenuous and in some cases reactive. This study, therefore, suggest a four staged approach in dealing with cultural differences. Practical implications – The managerial implication of this finding is that cultural fit constitutes a key factor in M&As' success and should be given the necessary attention at all stages of M&As. The tentative conclusion to be drawn here is that good pre-merger planning with culture placed at the heart of integration strategies and implementation and the creation of a positive atmosphere for the change – before initiating any actual consolidation of human and physical assets – are likely to contribute to acquisition success and value creation. Originality/value – This article provides a framework for managing culture in mergers and acquisitions