Case Study on Factors and Conditions Leading to Success in the Merger and Acquisition of Two Major Steel Manufacturing Companies in India

Mergers and Acquisitions (M&A) occur across developed and developing economies and are likely to change the economic and social landscapes due to the faster movement of capital and technological growth. However, research has shown that 83% of all M&A deals have failed to deliver shareholder value, and that this failure could be attributed to the lack of effective post-merger integration between the merging companies. Due to the importance of the post-M&A integration process in M&A performance, researchers have called for more studies of post-merger integration to explore how process dynamics influence M&A outcomes. The specific aim of this study is to enhance our understanding in regards to how the level of alignment that exists between various organizational components (strategy, responsibility, standards, structure, conflict and identity) of the two parties involved in an acquisition affect the post-acquisition performance of the new organization. Performance is measured by considering the degree of financial success after the merger process is finalized. This study is unique as it examines the key alignment issues that firms can face at different stages of the integration process in relation to strategic and organizational fit (Salter and Weinhold, 1979) during an M&A can affect its overall performance. More specifically, from a practical standpoint, the findings of the study are expected to provide organizations (particularly those likely to undergo M&A) with methods to enhance the effectiveness of inter-organizational integration. In addition, the outcome of the study provides valuable insights into the sequence of steps that must be taken to achieve successful mergers in an emerging economy. The study adopted a mixed method approach and used both qualitative and quantitative methods. In terms of findings, structure, responsibility, standards, conflict and identity were found to impact organizational culture, job satisfaction and organizational commitment. Job satisfaction was found to have the greatest impact on merger success.