A empirical evaluation of pre- and post- merger success: Factors and the impact of culture on mergers and acquisitions in Kenya

Abstract

Mergers and acquisitions are increasing due to the competitive and financial pressure of globalization. Previous research shows that there is a high failure rate in M&A. There is much written on ways and means that should be adopted by companies to ensure success. This study outlines the importance of balanced management of pre- and post-merger success factors and the impact of culture. Impact of culture has been considered separately since it affects achievement of other success factors and hence overall success of an M&A. The study based on a questionnaire, suggests that the achievement level of M&A objectives of acquiring companies in Kenya should be comparable to findings of similar studies; namely the objectives that drove the deal were met only half of the time. The results indicate that impact of culture together with pre-merger phase success factors - clear strategy, clear search criteria, strong integration team, thorough screening and due diligence, cultural due diligence, defined end state and preparing people psychologically -and post-merger phase success factors -coherent integration strategy, strong integration team, efficient and consistent communication, speedy implementation and aligned measurements -are becoming increasingly relevant. Even though they differ in their importance for individual companies in the population, they are all considered essential to increasing success rate of corporate combinations