Mergers And Acquisitions

MERGERS AND ACQUISITIONS: strategical - ORGANIZATIONAL FIT AND OUTCOMES1

KYUNGMOOK LEE and JOHANNES M. PENNINGS Department of forethought The Wharton give lessons University of Pennsylvania 2000 Steinberg Hall-Dietrich Hall

February 1996

We acknowledge the financial support of the Limperg Institute, Amsterdam, Netherlands and the Wharton School at the University of Pennsylvania. We appreciate the clerical assistance of Ilja Gottfried and Maurice Zinken and suggestions from Paul Allison, Josef Bruderl, Ranjay Gulati, and Michael Lubatkin.

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MERGERS AND ACQUISITIONS: STRATEGIC - ORGANIZATIONAL FIT AND OUTCOMES Abstract This paper examines the effects of imaging complementarity and organizational compatibility on merger and acquisition (M&A) outcomes. We also search the effect of firms previous M&A pick ups. Our investigation focuses on two classes of events following M&As: organizational disintegration and involvement in subsequent M&As, with the firm continuation following the M&A as the non-event. Using a multinomial logit model for repeated-event history analysis that reflects the dynamics of organizational evolution, we analyse 461 M&As in the history of the Dutch accounting industry.



Our results show that compatibility is not associated with the decay rate only is strongly related with the probablity that a firm will take up in additional M&As. Resouce complementarity is negatively associated with the odds of dissolution and positively associated with the probability to engage in additional M&As. The results also indicate that previous M&A experience enhances both the dissolution rate and rate to engage in additional M&As.

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INTRODUCTION This paper examines what happens to firms that are created by a merger or acquisition (M&A). We claim that the couplet between merging firms, together with their prior growth history, are crucial for understanding the evolution of the newly created organization. Organizational foundation is typically associated...If you want to get a full essay, launch it on our website: Orderessay



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