Does changing contexts affect linkages throughout the mergers and acquisition process? A multiphasic investigation of motives, pre‐ and post‐acquisition and performance

• Published date: 01 March 2020
• Date: 01 March 2020
• DOI: http://doi.org/10.1002/jsc.2318
• Author: Ioannis C. Thanos,Duncan Angwin,Vassilis M. Papadakis

RESEARCH ARTICLE

Does changing contexts affect linkages throughout the

mergers and acquisition process? A multiphasic investigation

of motives, pre- and post-acquisition and performance

Ioannis C. Thanos

1

| Vassilis M. Papadakis

1

| Duncan Angwin

2

1

Athens University of Economics and

Business, Athens, Greece

2

Nottingham University Business School, UK

Correspondence

Ioannis C. Thanos, Athens University of

Economics and Business, Athens, Greece.

Email: ithanos@aueb.gr

Abstract

Mergers and acquisitions (M&As) are important organizational change phenomena

that have attracted significant research focusing on many aspects, but only recently

has attention begun to concentrate on its complex multiphasic nature and its

embeddedness in multiple contexts. So far, the influence of the macro context in

M&A deals has been little studied and its interaction with M&A's multiphasic nature

has been ignored. This article addresses this limitation by investigating whether dif-

ferent macroeconomic wave and non-wave periods of M&A activity influence phases

of M&A in terms of motives, pre- and post-acquisition processes, and acquisition per-

formances. Drawing on a dataset of Greek M&As, an under-researched M&A con-

text, findings suggest that acquisitions in non-wave periods are driven by different

motives from those in-wave periods. Interestingly though, we found no statistically

significant changes in pre- and post-acquisition processes and M&A performance

between in-wave and non-wave periods. We suggest this finding of organizational

change may be due to the nature of the early stage of Greek M&A and may also

apply to the experience of other countries. Further theoretical and practical implica-

tions of these findings are also discussed.

1|INTRODUCTION

Every year, thousands of acquisitions take place, amounting to trillions

of dollars of activity, and this has long attracted the interest of both

academic researchers and business consultants. The bulk of current

research has enriched our knowledge of several important aspects of

acquisitions. These include the motives driving acquisitions, actions

taken before deal closure, integration approaches followed, and the

performance implications for firms conducting acquisitions

(Angwin & Meadows, 2015; Gomes, Angwin, Weber, & Tarba, 2013;

Teerikangas & Thanos, 2018). However, several important aspects of

acquisitions remain theoretically and empirically underexplored

(Bauer & Matzler, 2014; Haleblian, Devers, McNamara, Carpenter, &

Davison, 2009; Kolev, Haleblian, & McNamara, 2012). In particular,

the role of different temporal and spatial (Rouzies, Coleman, &

Angwin, 2019) contexts is only now beginning to be recognized of sig-

nificance to M&A processes and performance.

Finance and economics have investigated macroeconomic factors

that lead to the creation of an acquisition wave (e.g., Harford, 2005)—

defined as a short period when “intense acquisition activity”is

observed (McNamara, Haleblian, & Dykes, 2008). In the strategy liter-

ature, studies have adopted a more “micro”perspective by investigat-

ing the temporal effects of whether early or late acquisition in an

acquisition wave results in more successful deals (Andonova,

Rodriguez, & Sanchez, 2013; Carow, Heron, & Saxton, 2004; McNa-

mara et al., 2008) or whether firm characteristics influence the timing

of participating in M&A waves (Haleblian et al., 2012). Studies from

the US context suggest that early movers are more successful than

late movers (Carow et al., 2004; McNamara et al., 2008). Interestingly

though, Andonova et al. (2013) concluded precisely the opposite for

JEL Classification codes: M19, G34.

DOI: 10.1002/jsc.2318

Strategic Change. 2020;29:149–164. wileyonlinelibrary.com/journal/jsc © 2020 John Wiley & Sons, Ltd. 149

South American firms in Colombia, indicating that M&A findings are

geographically specific. The macro context in terms of waves of M&A

activity and geography may, therefore, play important roles in deter-

mining M&A performance and confounded results suggest there is

more to be done to understand their interactions fully.

We aim to extend this critical line of research on acquisition

waves in three ways. First, we consider and compare both wave

and non-wave periods, while past studies have examined wave

periods alone (Andonova et al., 2013; Carow et al., 2004;

McNamara et al., 2008). Indeed, all literature reviews on acquisition

waves tend to focus on the characteristics of the different waves

observed over the years in terms of geographic locations, indus-

tries, methods of payment, types of deals, determinants of M&A

waves and motives (see for literature reviews Kastrinaki &

Stoneman, 2012; Kolev et al., 2012; Martynova & Renneboog,

2008). To the best of our knowledge, this is the first study contra-

sting deals between wave and non-wave periods.

Second, we investigate whether acquiring firms buy for different

reasons, manage the processes differently (both before and after the

acquisition) by which they conduct acquisitions in-wave and non-

wave periods and ask whether there are any performance implica-

tions. The bulk of prior studies have focused on the performance

implications of participating in an acquisition wave or the firm factors

determining the timing of participating in an M&A wave and several

researchers have called for studies adopting more integrative frame-

works focusing on motives, processes and performance (Bauer &

Matzler, 2014; Cartwright & Schoenberg, 2006; Gomes et al., 2013).

The very few empirical studies which have used integrative frame-

works on M&As have suggested that M&As are multifaceted phenom-

ena and can only be better understood if we adopt multiple

perspectives within the same study (e.g., Birkinshaw, Bresman, &

Håkanson, 2000; Gomes et al., 2013; Larsson & Finkelstein, 1999).

Bauer and Matzler (2014) for example, suggested that M&A perfor-

mance is influenced by actions taken both before and after deal

closure (pre- and post-M&A processes). Larsson and Finkelstein

(1999) in their often-cited work offered empirical evidence demon-

strating that synergy realization can be better understood if we

combine perspectives from finance, economics, strategy and orga-

nizational theory and examined constructs related to motivation

and processes. Birkinshaw et al. (2000) presented different schools

of thought and argued that an integration of these would result in

better insight on what influences M&A performance. Also, the liter-

ature review by Gomes et al. (2013), of key success factors in the

M&A process, also suggested that understanding post-acquisition

integration would provide useful insights into what affects perfor-

mance. Hence, studying multiple facets of M&As such as motives,

pre- and post-M&A processes can result in improving our knowl-

edge of what affects M&A performance.

Third, we focus upon a non-U.S. setting (i.e., Greece). Recent liter-

ature reviews suggest that the overwhelming majority of acquisition

studies draw upon secondary data from large publicly traded firms in

the United States. While analyzing such data provides significant

insights, the United States is a specific geographic and institutional

setting that is quite different to many other countries around the

world. For that reason, there have been many calls for studies that

use perceptual data from outside the United States (Andonova et al.,

2013; Cartwright & Schoenberg, 2006; Haleblian et al., 2009). Other

major settings for M&A activity include the UK which has also been

heavily researched (e.g., Ahammad, Leone, Tarba, Glaister, & Arslan,

2017; Angwin & Meadows, 2015; Schoenberg, 2006) and the stronger

European economies such as Germany (e.g., Bauer & Matzler, 2014;

Strobl, Bauer, & Matzler, forthcoming), France (e.g., Meschi & Métais,

2015), and the Nordic countries (e.g., Teerikangas & Thanos, 2018).

However, the weaker European economies from the southeastern

European context where M&As on any scale are a more recent phe-

nomena, have received very little attention indeed. These settings

may present significant variations to establish M&A patterns as these

countries have far less well developed institutional structures

supporting M&A activity and companies are generally far less experi-

enced in M&As. In these countries, companies are mostly family busi-

nesses which have a different ownership structure compared to large

US or UK firms, which have been sampled in previous M&A studies,

and this can have an impact on their M&A processes (Miller, Breton-

Miller, & Lester, 2010). The M&A processes followed by family firms

deserve further theoretical and empirical attention according to a

recent literature review from the family business area (Worek, 2017).

The use of data from a southeastern European country (i.e., Greece),

may shed some important light on the issues raised above and is likely

to have implications for all southeastern European economies, which

have recently experienced their first M&A waves and maybe other

early-stage (in M&A terms) countries further afield.

The rest of the article is organized as follows. The following

section presents an overview of the acquisition literature demonstrat-

ing the need to study motives, processes, and performance and pro-

ceeds with the development of hypotheses. The next

section concerns the research methods employed in the two studies

noted above followed by a section reporting the results. The final

section discusses the implications of our findings and concludes with

a list of limitations and suggestions for future research.

2|LITERATURE REVIEW ON

ACQUISITION WAVES

Most of the acquisitions of the past century have occurred in seven

waves (Kolev et al., 2012; Martynova & Renneboog, 2008). Each of

the seven acquisition waves differs from the others in terms of char-

acteristics such as its geographical focus (USA, Europe, Asia), the

source of financing (cash, stocks, mixed), the style of deals (hostile

vs. friendly), the primary strategies (diversifying or horizontal). How-

ever, all waves have some common characteristics in terms of the way

they started and ended (Kolev et al., 2012; Martynova &

Renneboog, 2008).

Specifically, as detailed by Martynova and Renneboog (2008),

waves generally occur in periods of economic recovery (e.g., their first

and second waves took place in the periods following the First and

150 THANOS ET AL.