Business Process View to Mergers and Acquisitions Integration: Improving Deal Performance

Mergers and acquisitions have become an important method for companies to grow and gain competitive advantage. Yet, up to 60-80% of all the acquisitions fail. In order to access value from the deal, a successful integration is required. Post-merger integration is the process where the financial and strategic value of the deal are realized. This re- search answers the call to create linkages between different post-merger integration crit- ical success factors and determine factors affecting the integration speed. This study is among the first ones to adopt a cross-sectional view to post-merger integration across different business functions in a project-based organization and thus provides a new viewpoint to the mergers and acquisitions literature. The aim of the research is to determine typical integration related problems in different business functions in a project-based organization while providing solutions to these problems with different post-merger integration best practices. As a result, the research sheds light on the determinants of integration speed and creates connections between different post-merger integration critical success factors. The research is carried out as a combination of case study and action research. A literature review is carried out to form a holistic picture of the critical success factors and best practices recognized in the liter- ature. The empirical part of the research utilizes interview data and participant observa- tion to surface post-merger integration problems in the case organization. This data is analyzed and reflected on the literature. As an outcome, typical post-merger integration problems in project-based organizational context are recognized and relevant best prac- tices applied together with the interview data to address these problems. This research introduces 17 propositions addressing integration speed and deal performance hence introducing determinants of integration speed and actions improving deal performance. The findings of the research imply that by recognizing the business function specific problems and success factors, the performance of a merger or acquisition deal can be improved. Successful post-merger integration requires the understanding of these prob- lems as well as the capability to execute the integration in a manner addressing these problems. The 17 propositions regarding integration speed and deal performance are to guide managers to faster integration while accessing more value from the deal