between merger and syndrome: the intermediary role of emotions in four cross-border m&as

Between merger and syndrome: The intermediary role of emotions infour cross-border M&As

Rudolf R. Sinkovics a,*, Stefan Zagelmeyer b, Verena Kusstatscher c

a The University of Manchester, Manchester Business School, Booth Street West, Manchester M15 6PB, United Kingdomb International University of Applied Sciences Bad Honnef - Bonn, Mulheimer Strasse 38, Bad Honnef D-53604, Germanyc Shiva-Shakti-Center, Santo Stefano 117/D, Villanders, Bozen I-39040, Italy

1. Introduction

A series of merger waves has characterised the most recent decades (Buckley & Ghauri, 2002), a function of deregulation,market liberalization, technological change and globalisation (Schweiger & Very, 2001). The enthusiasm with whichmanagements forge these fashionable types of agreements is likely to continue as the current economic crisis will putadditional pressure on companies to restructure. Even from a financial perspective, M&As can be characterised by misplacedexcitement and overstated expectations, because in practice between 50% and 80% of all mergers and acquisitions areunsuccessful (Buono, Bowditch, & Lewis, 2002; Cartwright & Cooper, 2000; Cartwright & Schoenberg, 2006). An importantbody of research suggests that between one-third and one half of these M&A failures occur because special emphasis isplaced on strategic and financial goals of the deal (Stahl & Mendenhall, 2005) while they lack post-integration management(Hall & Norburn, 1987; Quah & Young, 2005; Schweiger & Lippert, 2005) and because they undervalue psychological, culturaland people issues (Cartwright, 1990; Dannemiller Tyson, 2000; Davy, Kinicki, Scheck, & Kilroy, 1989; Rees & Edwards, 2009).The problems do not change much when international rather than domestic M&As are concerned (Haleblian, Devers,

International Business Review 20 (2011) 27–47

A R T I C L E I N F O

Article history:

Received 24 June 2005

Received in revised form 20 May 2010

Accepted 24 May 2010

Keywords:

Acquisition

Culture

Emotion

Merger

A B S T R A C T

Recent M&A studies on human issues frequently call upon the ‘merger syndrome’ as a

typical post-merger phenomenon and a concept used to describe the – usually negative –

effects on the attitudes and behaviour of employees in the affected organizations.

Interestingly, although mergers and acquisitions are considered highly emotional events,

research on the emotional dimension of these events is still rare, especially as far as cross-

border activities are concerned. Combining theory-based reasoning and inductive data-

interpretation, this paper explores, analyses and discusses the role of emotions in mergers

and acquisitions. Drawing on elements provided by cognitive appraisal theory, affective

events theory, the literature on the merger syndrome, and qualitative in-depth interviews

with employees, this paper introduces an analytical framework for investigating the role

of emotions in international mergers and acquisitions. The qualitative analysis of four

cross-border M&A cases focuses on the impact of managerial communication and

behaviour on employee emotions, behaviour, and performance. In the final section we

discuss the implications of the findings for management.

Crown Copyright � 2010 Published by Elsevier Ltd. All rights reserved.

* Corresponding author. Tel.: +44 161 306 8980; fax: +44 161 275 6464.

E-mail addresses: [email protected] (R.R. Sinkovics), [email protected] (S. Zagelmeyer).

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McNamara, Carpenter, & Davison, 2009; Rees & Edwards, 2009), in effect, international M&As are fraught with more dangersthan domestic ones (Buckley, 2010; Buckley & Ghauri, 2002).

However, although the human side in international mergers and acquisitions receives greater attention in the recentliterature (Aguilera & Dencker, 2004; Daniel & Metcalf, 2001; Giessner, Viki, Otten, Terry, & Tauber, 2006; Rees & Edwards,2009; Schweiger & Ivancevich, 1985; Schweiger & Weber, 1989; Seo & Hill, 2005; Stahl & Mendenhall, 2005; Stahl & Voigt,2008; Tanure, Cancado, Duarte, & Muylder, 2009), the analysis of emotional aspects of mergers is still in its infancy. This ishighly surprising, considering that M&As are suggested to be ‘highly emotional life events’ (Buono & Bowditch, 1989), andresearchers from a variety of academic disciplines strongly agree that emotions influence human thinking, attitudes andbehaviour and are highly relevant for organisational behaviour (Baron, 2008; Boudens, 2005; Ciompi, 1999; Elster, 1999;Frijda, 1986; Gooty, Gavin, & Ashkanasy, 2009; Huy, 2002; LeDoux, 1998; Martin, 1998; Russell, 2008).

The general management literature has slowly taken up on emotions in their studies since the 1990s (see e.g. Ashkanasy &Daus, 2002; Cartwright & Schoenberg, 2006; Fineman, 1999; Goleman, Boyatzis, & McKee, 2002). Yet, with only a fewexceptions (see e.g. Kiefer, 2002a, 2002b), research on the role of emotions in merger and acquisitions is still rare. Withreference to the unabated growth of M&As in international business, Carlos Ghosn, CEO of Nissan Motor Co., and Jean/PierreGarnier, former CEO of GlaxoSmithKline, conclude in their introductory comments to the book by Stahl and Mendenhall(2005) that sociocultural and human resource isues are ‘‘[.] most important yet often neglected areas in the field of mergersand acquisitions’’ that are ‘‘essential for companies to create and maintain competitive advantage’’ (Ghoshn & Garnier, 2005,p. xix). In a similar vein, Ashkanasy (2005) draws on reports (Fugate, Kinicki, & Scheck, 2002; Kavanagh & Ashkanasy, 2004;Kusstatscher & Cooper, 2005) that support the view that emotions may be especially relevant in M&A situations, indeed, maybe critical in firms’ strategic decision making (Ashkanasy & Ashton-James, 2005). However, despite the affirmation ofimportance, the role of emotions in international mergers and acquisitions is a relatively neglected area in management andinternational business research.

The objectives of this paper are to explore the relevance of emotions in the context of M&As and to help managersunderstand the emotional dimension of the M&A experience, identify the respective antecedents, and develop remedialstrategies. The paper is structured as follows: drawing on cognitive appraisal theory and affective events theory (Weiss &Cropanzano, 1996), we argue that, as events, M&As trigger emotions with substantial consequences. We then systematicallyanalyse the ‘merger syndrome’, a term popularised by Marks & Mirvis (1985), which refers to a phenomenon in mergers andacquisitions encapsulating a series of loosely described human reactions, which are usually considered problematic from theperspective of management. We use the insights gained from the previous analysis to develop a conceptual and analyticframework for the role of emotions in mergers and acquisitions, with specific attention to the role of managerialcommunication and behaviour. The empirical part of the paper will examine how managerial communication and behaviourinfluence employee emotions, drawing on interviews with managers and employees of four cross-border M&A cases. Thefinal section draws conclusions and discusses the study’s limitations.

2. Core concepts and analytical framework

While emotions as a phenomenon are not alien to management and organisational behaviour research, to the best of ourknowledge, there is no systematic account of the role of emotions in merger & acquisition processes. Drawing on elementsprovided by cognitive appraisal theory, affective events theory, and the literature on the merger syndrome, we gatheredadditional qualitative data to explore and gain a deeper understanding of the occurrence of emotions in mergers andacquisitions and the related specific context. What emerged from the iterative process of literature review, data gatheringand data analysis is not a testable theory, but an analytical framework, which includes the antecedents of emotions, their roleconcerning employee attitudes and behaviour, and their consequences for employee outcomes, and thus companyperformance and the success of the M&A process.

2.1. Emotions: cognitive appraisal and affective events theory

Emotions have been studied within various scholarly disciplines. Owing to the large variety of the different conceptualperspectives, there is a lack of a consensual definition of emotion (Ashkanasy, Hartel, & Zerbe, 2000; Izard, 2009; Kuppens,Stouten, & Mesquita, 2009; Scherer, 2009). In the context of the present study, emotion is defined as a mental state of (action)readiness that arises from cognitive appraisals of events, social interactions or thoughts. It has a phenomenological tone, isaccompanied by physiological processes, and is often expressed physically (see Bagozzi, Gopinath, & Nyer, 1999). In contrastto other, relatively broad and open definitions, this definition presents emotion as a tangible phenomenon,1 i.e. it implies‘action readiness’ (Frijda, 1986) which makes it easier to capture this mental state empirically.

The cognitive appraisal perspective proposes that an emotion requires cognition in the form of appraisals (e.g. Frijda,1986; Mandler, 1984). To this end, the central nervous system of an individual needs to be exposed to internal (this is,

1 While both ‘emotion’ and ‘mood’ are affective states, but differ in terms of intensity, duration and relation to a particular object and behavioural

response, the distinguishing feature being that emotions are directed at someone or something, while moods lack a specific direction (Frijda, 1993; Weiss &

Cropanzano, 1996).

R.R. Sinkovics et al. / International Business Review 20 (2011) 27–4728

thoughts) or external stimuli (someone else’s statement or behaviour) in order to interpret and evaluate them (Lazarus,1991; Schachter, 1964). Appraisals are seen as interpretations of individuals related to significant changes in theenvironment. Depending on the subjectively perceived relevance of these appraisals, their urgency, or magnitude ofchallenges to an important value, the individual’s brain is more or less activated. This leads to a physiological state that iscalled an emotion and which is linked to a readiness to act.

There are numerous semantic classifications of emotions, ranging for example from anger, fear, joy, love, sadness tosurprise, and there is an increasing literature on the impact of emotions on cognitions, attitudes and behaviours in a workcontext (for overviews of classifications and research, see Briner, 1999; Weiss & Cropanzano, 1996).

Affective events theory (AET) provides a comprehensive framework for analysis of affective experiences such as moodsand emotions in work settings (Weiss & Cropanzano, 1996). AET argues that certain situational aspects of the workenvironment, so-called ‘affective events’, systematically trigger human affects in workplace settings. In the framework, theexperience of positive (pleasant) and negative (unpleasant) emotions is initiated by work events which, in turn, aredetermined by diverse factors in the work environment. The respective affective states would then lead to affect-drivenbehaviours and changes in work attitudes. The emotional reaction to events, as well as the impact of emotions on behaviour,is mediated by individual differences in trait affectivity. Work attitudes are influenced by emotions as well as by factors inthe work environment. Finally, judgement-driven behaviour of employees is determined by work environment factors aswell as work attitudes (Ashkanasy, Hartel, & Zerbe, 2000; Weiss & Cropanzano, 1996).

As far as the relationship between affective states on the one hand and attitudes and behaviour on the other is concerned,core affects (Seo, Barrett, & Bartunek, 2004) and emotions (Huy, 2002; Larsen & Diener, 1992) include two dimensions,namely the pleasant-unpleasant dimension and the activation-deactivation (or high activation vs. low activation)dimension. The latter may be interpreted in the sense of behavioural readiness or energy. Thus, if a core affect is activating,there is more likely to be some behavioural consequence as compared to a core affect which is deactivating.

Although emotions such as delight and enthusiasm, or anxiety, anger, fear, desperation or grief, can extend beyond theindividual and include the group, we argue that it is still the individual who experiences a certain emotion (see Lazarus,1995).2 Yet we appreciate that emotions in individuals can be triggered by group-level processes or are related to (social)identification with groups, as suggested by social identity theory (Hogg & Terry, 2000; Ullrich, Wieseke, & Dick, 2005).

2.2. The merger syndrome: phenomenon and emotional aspects

The merger syndrome is a phenomenon first documented by Marks and Mirvis (1985, 1986). The term can be seen as asummary construct, describing employees’ as well as managers’ reactions to a merger or acquisition. While the term ‘mergersyndrome’ enjoys the status of a buzzword, there is little systematic and structured analysis concerning itsconceptualization, antecedents and consequences. In the ‘merger syndrome’ literature, emotions are mentioned, but theirrole, antecedents and consequences are discussed only at a very general level. The merger syndrome is usually characterisedby a comprehensive set of issues, such as change of identity, centralisation of decision-making, stress, power games,decreased productivity, and by feelings of insecurity, anxiety, mistrust and manifold similar and simultaneously occurringphenomena (Appelbaum, Gandell, Yortis, Proper, & Jobin, 2000; Bruckman & Peters, 1987; Marks, 1999; Marks & Mirvis,1986; Schlieper-Damrich, 2000).

In the context of mergers and acquisitions, emotions arise once an individual perceives a challenge to an important valueor an important goal in the M&A process. An increased level of uncertainty, or rumours about restructuring and job losses,perceived threats to social identity, or speculations about potential organisational change processes, may initiate theseemotions. The individual cognition-emotion chain may be stimulated as soon as there are rumours about a possible mergeror acquisition, and may peak in terms of intensity when the M&A is officially announced and/or the subjective realisation ofchallenges to important values is experienced.

Another aspect of post-M&A integration is that the emotional aftermath may last until long after the successfulcompletion of the M&A, either as long as any member of the organisation perceives a challenge to an important value or aslong as stories and myths are told about the times before the merger and/or acquisition.

Emotions may occur in any of the organisations involved in a M&A and at any level in the organisational hierarchy. Theymay be positive or negative about the change process in its entirety or about aspects of it. Different occupational groups aswell as individuals may be affected in different ways. There may be differences between victims, survivors and executionersin relation to downsizing, and different employees may have different coping strategies (Clair & Dufresne, 2004; Kets deVries & Balazs, 1997; Marks, 2006, 2007; Molinsky & Margolis, 2006; Terry, Carey, & Callan, 2001). Even within the samecompany, there may be winners and losers. And since emotions are experienced at the individual level, we appreciate thatemotions may vary between individuals for reasons of attitude and temperament.

Our understanding of the impact of different styles of management communication and behaviour on employee emotionsduring a merger or acquisition is still patchy. Some noticeable exceptions to the paucity of research on this topic areAppelbaum and Gandell (2003), Fugate et al. (2002), Guerrero (2008), Kiefer (2002b), Kiefer and Eicken (1999), Schweiger

2 This perspective follows the individual view, taken by psychologists (cognitive appraisal theorists). This differs from the social-constructivist theorists,

who view emotions as a socially constructed and inter-subjective phenomenon (e.g. Averill, 1980, 1982; Parrott & Harre, 1996).

R.R. Sinkovics et al. / International Business Review 20 (2011) 27–47 29

and Denisi (1991), and Vince (2006). However, their work is based on single case studies, has different goals and objectives,and differs from the present project in terms of research approach. Fairfield-Sonn, Ogilvie, & DelVecchio (2002) take a slightlydifferent approach, focusing on employee attitudes rather than on emotions in M&As, but they remind us that employeeattitudes as well as employee behaviour are affected by factors other than emotions, such as, for example, individual factors,role-related factors, and environmental variables.

2.3. The analytical framework: the role of emotions in mergers and acquisitions

On the basis of the arguments developed in the previous sections, we draw the following conclusions to inform andstructure our subsequent empirical research project:

(1) Employees’ emotions in a M&A situation are triggered by subjectively-perceived managerial stimuli, which relate tomanagerial communication and management behaviour.

(2) Employees’ emotions lead to a disposition to act/react and so influence their attitudes and behaviour. Attitudes andemployee behaviour contribute to the success or failure of the merger or acquisition.

It follows that managerial stimuli associated with the emotional event of an M&A influence employee emotions.Employee emotions then influence employee attitudes and behaviours - a specific configuration of which has been labelled‘merger syndrome’–which in turn affect the success of the merger or acquisition. This reasoning is the basis for thesubsequent development of a conceptual framework on the role of emotions in merger and acquisition processes.

Based on an iterative process of reviewing different strands of the literature, gathering qualitative data, and analysing thedata, we suggest a framework (Fig. 1), which allows us to explore and gain a deeper understanding of the role of emotions inmergers and acquisitions. The framework presents the merger syndrome as a specific configuration of employeeperformance (or outcome) variables. It includes three sets of independent variables, namely communication, managementbehaviour, and other M&A-related sets of variables. While we appreciate that a large number of factors may influence theemployees’ emotional state, our primary focus is on communication and management behaviour. The third set, here labelled‘other’ factors, includes variables that affect employee attitudes, such as job satisfaction and organisational commitment.

[(Fig._1)TD$FIG]

Fig. 1. Conceptual framework of the role of emotions in mergers’ and acquisitions.


Affective events theory appreciates that attitudes are associated with affective – including emotional – reactions ofemployees.

Emotions are considered as intermediary variables between the antecedents and the outcome variables. In addition, therelationship between antecedents, emotions and the performance variables may be influenced by several contextualvariables, which change the strength of the respective relationships. For example, the direction and intensity of theindividual employee’s emotional response may depend on dispositional factors, belonging to a particular occupational groupor simply on whether the individual is employed by the acquiring or the acquired company. Zerbe and Hartel (2000)emphasise that individual emotional reactions may differ according to the level of emotional intelligence and emotionalmaturity, which comprise the individual capacity that influences the copying behaviour. Finally, we appreciate that in linewith affective events theory the M&A as such may have a direct influence on attitudes. A detailed discussion of the differentelements of the framework will follow below.

2.3.1. Antecedents: M&A related features and events

The merger syndrome appears in domestic as well as in international ‘marriages’, within and across industries, in bothfriendly and hostile takeovers, and independently of the company sizes involved (Marks, 1997, 1999). Post-mergerintegration stages are characterised by centralisation of decision-making and by reduced communication with employees(Appelbaum, Gandell, Yortis, et al., 2000; Marks, 1988). This is due to the fact that in the pre-merger planning stage managersare expected to maintain strict silence about the upcoming decision, and therefore they are rather cautious not to reveal toomuch information prior to complete implementation (Marks, 1999).

High workload, high uncertainty, and high expectations tend to lead managerial teams in both companies to slide into amode of crisis management. This situation is sometimes compared to states of warfare where hard and critical decisions aremade, the other side’s perspective and priorities are misinterpreted or fully ignored, and where counter-strategies arediscussed (Marks, 1988, 1999; Marks & Mirvis, 1986).

Employees feel as group members of their own organisation and identify with their organisational culture. Theacquisition by another company often implies a loss and a change of identity, which represents a challenge for the workforce(Cartwright & Cooper, 2000; Ullrich, Wieseke, & Dick, 2005; van Knippenberg, van Knippenberg, Monden, & de Lima, 2002).

One of the most evident signs of the merger syndrome is heightened self-interest. People are preoccupied with what theorganisational combination might mean for themselves as individuals, for their incomes, their careers and their families.They develop plausible stories and also figments of imagination about possible implications of the M&A on future benefits,on the future location of the site and headquarters, and on redundancies. Power games become more evident, and peoplestart to fight for their positions and privileges, for certain projects, and for ‘their’ products and services (Cartwright & Cooper,2000; Marks, 1999).

2.3.2. Emotions as intermediary variables

The merger syndrome demonstrates predictable and understandable human reactions during major corporate changes.However, it mainly involves defensive and negative responses. Unsurprisingly, employees going through a M&A are shakenby intensive emotions (Appelbaum, Gandell, Yortis, et al., 2000; Dickmann, 2002; Marks & Mirvis, 1986). Usually, those seento be more affected by big changes are the employees of the acquired company. That is why the merger syndrome showsstronger implications in the ‘weaker’ organisation (Appelbaum, Gandell, Yortis, et al., 2000; Hornig, 1985). The literature onemotional aspects of mergers and acquisitions is dominated by a focus on negative (unpleasant) emotions.

Most of the affected organisational members feel irritated and insecure. They are not (immediately) able to see theupcoming change as an opportunity and a positive challenge. To the contrary, they see it as a threat. There are usually notmany individuals who experience joy and pride after the announcement, and they are more likely to be found within theacquiring organisation. Many employees fear to lose their position, power or even their jobs. Their anxieties spill over to theirpartners and their children and become their problem, too (Appelbaum, Gandell, Shapiro, Belisle, & Hoeven, 2000;Cartwright & Cooper, 1996, 2000; Marks, 1999). The reaction to uncertainty often is aggression. Employees may feelovercome by a sense of helplessness, degradation, impotence and worthlessness and respond with bitterness, anger and rage

against the decision-makers and the acquiring organisation. Astrachan (1990) discusses the phenomenon that employeesmay be affected by separation anxieties related to the potential loss of colleagues and social networks in the M&A process.These emotions can also spill over into family life and lead to frustration, depression and to a sinking into apathy(Appelbaum, Gandell, Yortis, et al., 2000; Cartwright & Cooper, 1993; Dickmann, 2002). Suicides may occur in situationswhich are perceived as frightening and hopeless (Buono & Bowditch, 1989). The magnitude of these emotional responsesmay depend, in the individual case, on the extent to which the specific M&A is subjectively perceived as a challenge toimportant values.

In most of the M&A cases the buying company takes it for granted that they are doing business better than the acquired‘weaker’ organisation. Therefore they impose their strategy, procedures and products on the acquired company. People whohave to accept this then feel unsuccessful and react emotionally (with aggression or frustration). This situation is similar inmore ‘equal’ relationships, at the moment when persons in a leading position meet with their new colleagues in order to findpotential for future synergies. They have to check who produces the better products, uses more efficient processes, or worksmore effectively, and thus who is more ‘successful’. The internal contest for positions, privileges and projects leads toemotions like jealousy, mistrust and suspicion. Considering these turbulent situations and people’s high involvement and


vulnerability, it is difficult to come to ‘objective’ assessments and evaluations. Employees of the ‘weaker’ company often feeldisappointed and ashamed at being judged ‘unsuccessful’ and of feeling exhausted. It can also be noted that managerscommunicate less with their employees during M&As. This heightens doubts and distrust.

When the first co-workers and friends have been made redundant and have left the company, grief spreads out amongstthe survivors and they often feel pity (compassion) for their colleagues and a sense of guilt. This phenomenon is also knownas the ‘Survivors’ Syndrome’ (Appelbaum, Gandell, Yortis, et al., 2000; Davy et al., 1989). These emotions may later turn intoanger and aggression against the decision-makers.

2.3.3. Outcome variables: employee attitudes and behaviour

Employees’ identification with their company and their organisational commitment is likely to change after such a bigintervent Appelbaum, Gandell, Shapiro, et al., 2000; Appelbaum, Gandell, Yortis, et al., 2000; Bruckman & Peters, 1987;Covin, Sightler, Kolenko, & Tudor, 1996; Dickmann, 2002). The associated emotional turmoil often results in decreasedmotivation, job withdrawal, lower job satisfaction and reduced commitment towards the company.

These states are expressed by reducing the own working input to a minimum and doing work-to-rule only (e.g.Appelbaum, Gandell, Shapiro, et al., 2000). Another issue is the screening of the market for alternatives. Highly-qualifiedemployees start to leave the uncertain and exhausting situation voluntarily and to take up offers from other recruitingorganisations. In some cases this leads–next to the dismissals – to a mass exodus (e.g. Bourantas & Nicandrou, 1998; Marks &Mirvis, 1986). In order to cope with all these challenging events, people start to talk, gossip, and to distract each other fromwork. This happens especially when top-down information is unclear or is considered insufficient. The rumour-mill startsand worst-case scenarios boom, because no news is usually decoded as ‘bad news’. The phone bills increase while overall jobperformance goes down (Cartwright & Cooper, 1993, 2000; Marks, 1999; McTigue Bruner & Cooper, 1991; Siu, Cooper, &Donald, 1997).

Information and know-how are sometimes consciously held back as a consequence of mistrust and suspicion. In such anatmosphere, cooperation becomes difficult and good teamwork almost impossible. The partner-organisation and even co-workers are sometimes seen as competitors rather than partners. The tensions in the relationships between people on thesame hierarchical level inside and across the companies and in superior-employee relationships are likely to increase(Marks, 1997; Marks & Mirvis, 1985).

Moreover, managers and employees from relatively well-prepared M&As feel an extremely high degree of stress owing tothe high level of uncertainty, the increased working load, and the high expectations of success. Stress reactions (symptoms ofstress), decreased well-being, and deteriorating health are the consequences which appear in the post-merger months.Executive managers are especially affected by this phenomenon (Baruch & Woodward, 1998; Siu, Cooper, & Donald, 1997;Warr, 1994). Amongst the amount of symptoms of decreased well-being there are: higher blood pressure, headaches, visualproblems, tingling in arms and legs, indigestion, diarrhoea or frequent urination, impotence or menstrual problems, muscletension, sleep problems, change of eating habits, increased smoking, use of alcohol or dependence on drugs, careless drivingand proneness to accidents, excessive and rapid mood swings, lack of concentration, and increased irritability and anxiety.The health-risk factors are high levels of stress (work demands and overloads), loneliness of command, and risks of failure.These risk factors affect all dimensions of health, i.e. physical well-being, psychological (or emotional) health, spiritualvitality and ethical health. Physical fitness, social support, stress management skills and a balanced investment in lifeactivities are supposed to be strengths—factors which influence physical and mental well-being positively and lead topositive long-term effects. For employees, this means vitality, low morbidity and mortality; for companies, it meansorganisational and financial health (Campbell Quick, Gavin, Cooper, Quick, & Gilbert, 2000; Cartwright & Cooper, 1993, 1994,2000; Cooper & Cartwright, 1994; Marks & Mirvis, 1986; Nelson, Cooper, & Jackson, 1995; Sparks, Cooper, Fried, & Shirom,1997).

Considering the undesirable outcomes mentioned in this section, it is worth analysing what managers can do in order toavoid the negative effects of the merger syndrome. In the following empirical section of the paper, our efforts regarding acomprehensive understanding of this phenomenon will therefore be directed towards those elements which can actively beinfluenced by managers. This is why we will investigate the relationship between management communication andbehaviour and employees’ emotions.

3. Empirical study

The conceptual framework developed in the previous section will be further examined and developed in the followingempirical study. In the context of our study, the combination of inductive methodology and deductive reasoning aid anempirical exploration of the viability of the framework. This follows Easterby-Smith, Thorpe and Lowe (2002) who argue thata qualitative approach permits the kind of flexibility that allows for fluid and continual renegotiation of central dimensionsof the conceptual framework. Formal and structured, computer-assisted textual data analysis was employed on the data(Sinkovics, Penz, & Ghauri, 2005) using QSR NVivo (Richards, 2000). While results are still contingent on user-input andassessment, the use of computer-assisted qualitative data analysis software (CAQDAS) provides procedural advantagescompared to traditional means of textual analysis (Marshall, 2002). There are also suggestions that formalised proceduresmay enhance the trustworthiness of qualitative research (Sinkovics, Penz, & Ghauri, 2008).


3.1. Research methods

The sampling process was driven by two goals. The first goal was to identify organisations and individuals to provideinformation necessary for developing and improving the analytical framework. Concerning this goal, the sampling processinitially followed the principles of theoretical sampling. Glaser and Strauss (1967, p. 45) describe theoretical sampling as ‘‘aprocess of data collection for generating theory whereby the analyst jointly collects, codes and analyses his data and decideswhat data to collect next and where to find them, in order to develop his theory as it emerges.’’ The population from whichsamples were drawn for this study was defined as companies with recent exposure to international mergers andacquisitions.

The second goal developed in the research process when it became clear that the impact of mergers and acquisitions onemotions may differ in relation to the different types of mergers and acquisitions (partial or full M&A), differentestablishments (of the acquiring or acquired company) and the occupational group (top-level management, middle-management, employees). Thus we tried to get information from interviewees who fell in the different categories. Thisprocess of sampling now followed more the principles of purposive sampling. The latter sampling took place at two levels,organisation and interviewee level. Organisations were chosen because they fell into a particular category of merger andacquisition type. Individuals were chosen according to their occupational group within the respective organisations. Thissampling strategy allowed us to select interviewees purposively in terms of criteria that were central to the main topic ofresearch–the appraisal of emotions in merger and acquisition processes. We stopped the sampling process and theinterviews when we felt that additional interviews would not yield new insights into the phenomenon.

The sample organisations were gradually selected to meet the requirements of the investigation. Gradually-developednetworks of companies, in the areas of Northern Italy, Austria, and Germany were invited to take part in the study. Access attop-level and middle-management level, encompassing the permission to involve clerical and support staff, was secured infour companies. These all had experienced international M&As, involving different organisational and national cultures (seeTable 1).

The first part of the sampling process followed the principles of ‘theoretical sampling’, in contrast to drawing on samplesof specific groups of individuals or organisations with predefined characteristics (Corbin & Strauss, 1990). The fourcompanies differed in size and were operating in various industry sectors. They include partial (e.g. GermanCo3 byAustrianCo2 1993) and 100% takeovers (e.g. the Italian subsidiaries of AustrianCo1 by ItalianCo2, GermanCo3 by AustrianCo21995, GermanCo1 by GermanCo2) of hostile (e.g. GermanCo1 by GermanCo2) and benevolent nature (e.g. ItalianCo1 buysFrenchCo), mergers of equals (ItalianCo1 with FrenchCo, AustrianCo3 with UKCo) and high-speed (ItalianCo2 buysAustrianCo2) vs. low-paced processes (ItalianCo1 with FrenchCo, AustrianCo2 with GermanCo3). This is why the sample wasdeemed particularly suitable for probing the relevance of the concept of emotions. While dismissals were necessary in somecompanies (e.g. GermanCo1, AustrianCo3), this was not the case in others (ItalianCo1). Members from acquiring as well asfrom acquired organisations were interviewed. Five informants were ItalianCo1 members, four from GermanCo1, three fromItalianCo2, and six from AustrianCo3 (three former AustrianCo2 and three former GermanCo3 members). The 18interviewees were identified inside the respective companies after approaching company executives and requesting supportfor the study. In addition, individuals within the company were approached on site, before and after scheduled interviews.Four of the interviewees were top managers/company owners, eight middle managers, and six employees without anyleading function. One-third of the 18 interviewees were female, two-thirds male. Nine of the interviewees reported that theircareer was affected by the changes due to the merger, two were dismissed, six did not experience major changes, and onecase was outside these categories.

In the in-depth interviews, we used projective techniques and critical incidence technique, combined with observations(looking specifically at interviewee behaviour and cultural indicators) and secondary data (newsletter, newsletters) in orderto get a clearer picture of the phenomenon. A semi-structured interview protocol was developed to allow for open interviewswith top managers, middle managers and employees without supervisory function. The interview protocol was piloted withtwo practitioners involved in M&A and two academics, knowledgeable in the subject-area and subsequently revised beforefinal deployment in eighteen interviews. This open approach was chosen to maintain open-mindedness and an exploratorycharacter unconstrained by preconceptions. The guiding questions for the interviews were designed in such a way thatcompany’s situation, managerial communication strategies and management activities were elicited. After two pre-testinterviews, the first part of the revised interview guidelines included sections on the M&A history, the role of theinterviewees and the impact on the interviewees. This part tried to avoid referring to concepts such as emotions and feeling,because this appeared to create an uncomfortable feeling for the interviewees in the pre-test. The remaining parts of theguidelines included sections on managerial communication, stress, management behaviour, emotions, culture and identityand performance outcomes. In total, 16 individual in-depth interviews and one group interview with two people wereconducted. Critical-incident technique (see e.g. Chell, 2004; Roos, 2002) was used to initiate the interviews, and employeeemotions were captured using a projective technique in which respondents produced a graphical representation of theiremotions throughout the M&A process.

Responses from the three hierarchy levels were enriched by observations and field notes (interview behaviour such asgestures to indicate irony/humour; cultural indicators, such as architecture, configuration of cafeterias/meeting rooms) andsecondary data (newsletters, newspapers). These were particularly useful to support the plausibility of concepts anddimensions drawn from the interviews and to provide a clearer picture of the underlying phenomena (Fetterman, 1998; Yin,


Table 1

Managerial communication and behaviour during M&A, and assessment of the impact of management communication and behaviour on employee emotions.

Description and company background Approach to management communication and

behaviour during M&A

Impacts of mgmt. communication & behaviour

on employee emotions

Company: ItalianCo1

Company background Approach to management communication � ItalianCo1 members felt proud and positive about

the acquisition of their second-largest competitor.

Announced job vacancies made them feel secure.

Some negative feelings arose because of cultural

differences and language problems.

� ItalianCo1 is an Italian producer of lifts, cableways,

urban transport systems, snow groomers and

snowmaking systems

� ItalianCo1’s CEO announced the acquisition at

FrenchCo in France and demonstrates a strong

commitment to address

concerns of members of the acquired company� Interviews were conducted with ItalianCo1

members. � Commitment towards new partner company

demonstrated by learning the language

of the acquired company

Percentage of statements related to positive/

negative emotions (N = 111 statements)

� Positive/pleasant emotions: 57%M&A context

Approach to management behaviour� Negative/unpleasant emotions: 43%

� ItalianCo1 bought several companies in the

last few years.

� No dismissals, additional staff

employed instead

� In 2000 ItalianCo1 bought the second biggest

competitor on the global market, French

company FrenchCo.� FrenchCo’s management board left in place –

purely French managers. ItalianCo1’s CEO

only takes vice-president role

Ranking of the most frequently mentioned emotion

related statements

� ItalianCo1/FrenchCo are now world-market

leaders in their sector.

� Language courses are offered in order to

overcome communication problems and

seminars to facilitate M&A integration projects

(1) (+) Feelings of certainty/security

� Job rotation between the two companies

on regular basis, frequent social gatherings

(2) (+) Joy and satisfaction

(3) (+) Trust/confidence

(+) pride

Percentage of statements related to

management behaviour and

communication (N = 115 statements)

(4) (�) Feelings of uncertainty/insecurity

amongst employees

(�) and anxiety/(existential)

fear/dread/terror

(�) feelings of opposition/

resistance

� Positive management behaviour and

communication: 85%

(5) (�) Anger (with the others)

(�) arrogance

� Negative management behaviour and

communication: 15%

Company: GermanCo1

Company background Approach to management communication � Most of GermanCo1 staff felt irritated and disappointed

by the way the acquisition was managed. Severe

management blunders were due to false promises,

long periods of uncertainty, disillusions, anxieties,

distrust in and anger at the buying company.

� GermanCo1 was an international producer

of body care products and cosmetics with

headquarters in Germany.

� The official announcement by GermanCo2’s CEO is

perceived very differently by GermanCo1

members: from competent and promising to

hypocritical and dishonest� Interviews were conducted with former GermanCo1

staff of an Austrian-based subsidiary. � Internal communication differs from department to

department. Manager personality type and traits

appear to make a difference (regular communication

vs. ‘poker-faced’ non-communication)

Percentage of statements related to positive/negative

emotions: (N = 506 statements)� Positive/pleasant emotions: 22%

� Negative/unpleasant emotions: 78%

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M&A context Approach to management behaviour

� 1995 all GermanCo1 subsidiaries were sold to the

Germany based GermanCo2 Group.

� Dismissals announced repeatedly and

over a long period of time

� Within the first two years after the takeover, GermanCo2

closed most of the GermanCo1 subsidiaries, transferred

the production of selected GermanCo1 products to own

subsidiaries and continued to use the strong brand

name of GermanCo1.

� Misleading promises and information about

the future of the subsidiary

Ranking of the most frequently mentioned emotion

related statements

� Some line managers organised informal

farewell parties and tried to keep up morale.

(1) (�) Feelings of uncertainty/insecurity amongst employees

(2) (�) Feelings of uncertainty/insecurity amongst managers

Percentage of statements related to management

behaviour and communication (N = 232 statements)

(3) (�) Distrust


communication: 52%

(4) (�) Anxiety/(existential) fear/dread/terror

(�) negative atmosphere


communication: 48%

(5) (�) Anger/rage/aggression/fury/reproach/

accusation

Company: ItalianCo2

Company background Approach to management communication � ItalianCo2 members felt generally positive and excited

about the acquisition, but struggled with rapidly-changing

organisational culture.� ItalianCo2 is a South Tyrolean (Italian)

family-owned sport article retailer.

� Big official announcement by

ItalianCo2’s owner� They grew continuously over the last 25 years. � Open communication

Percentage of statements related to positive/negative emotions: (N = 185

statements)M&A contextApproach to management behaviour � Positive/pleasant emotions: 45%� Biggest expansion was experienced in 1999 when

ItalianCo2 decided to buy 10 Italian outlets of the

Austrian based sport article

wholesaler AustrianCo1.

� Initially no dismissals; owner is committed

to keeping everybody onboard.

� Negative/unpleasant emotions: 55%

� Cultural and organisational changes due

to the fast-growing company size

(e.g. personal, family-like communication

not possible to maintain)

Ranking of the most frequently mentioned emotion related statements

(1) (+) Joy/satisfaction

(+) curiosity

Percentage of statements related to management

behaviour and communication (N = 106 statements)

(2) (+) Trust/confidence


communication: 89%

(3) (�) Anxiety/(existential) fear/dread/terror

(�) feelings of opposition/resistance

� Negative management behaviour

and communication: 11%

(4) (+) Motivation

(�) disappointment


(+) excitement (emerging challenges)

Company: AustrianCo3

� AustrianCo2 (and) GermanCo3 members suffered from the slow

integration process (Z&S) and the long years of uncertainty and

fears. Now they consider AustrianCo3 well integrated and

as an attractive culture mix. The announcement of the merger

with UKCo was unexpected and created worries and anger at

decision-makers.

Company background Approach to management communication

Members of former AustrianCo2 Members of former GermanCo3

� Before acquiring GermanCo3, AustrianCo2

was a traditional Austrian family business and

producer of light engineering products [?]

(innovative, entrepreneurial).

� The two announcements were done in

written form; some had heard the

news from clients

% of statements related to (+)/(�) emotions:

(N = 184 statements)

% of statements related to (+)/(�)

emotions: (N = 165 statements)

� GermanCo3, a medium sized German

producer of light systems was well-known

for its art & design.

� Communication mostly done via line

managers (more/less regular, depending

on line manager)

(+) Emotions: 34% (+) Emotions: 28%� The company name is now AustrianCo3. Approach to management behaviour

(�) Emotions: 66% (�) Emotions: 72%� Interviews were conducted with both, former

members of the Austrian AustrianCo2 and the

former German GermanCo3 company.

� Dismissals were announced over

years only

� Very slow integration process (Z & S),

joint projects only started years

after the acquisition

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Description and company background Approach to management communication and

behaviour during M&A

Impacts of mgmt. communication & behaviour

on employee emotions

Ranking of the most frequently

mentioned emotion related statements

Ranking of the most frequently

mentioned emotion-related

statements

M&A context 1 Percentage of statements related to

management behaviour and communication

(1) (�) Feelings of uncertainty

amongst employees

(�) anger/rage/aggression/

fury/reproach/accusation

(1) (�) Feelings of uncertainty

amongst employees� In 1993, 49% of GermanCo3 was bought by

AustrianCo2, two years later the complete

takeover took place.

AustrianCo3 (N = 274 statements)


(+) motivation

(2) (�) Anxiety/(existential)

fear/dread/terror

M&A context 2� Positive management behaviour and

communication: 55%

(3) (+) Positive mood

(�) anxiety/(existential)

fear/dread/terror

(3) (�) Anger/rage/aggression/

fury/reproach/accusation� In 2000 AustrianCo3 merged with one of its

biggest competitors, the British company

UKCo, which had about the same company

size (in terms of employees and annual

turnover) as AustrianCo3.


communication: 45%

(4) (+) Joy/satisfaction

(�) feelings of uncertainty

amongst managers

(�) arrogance

(4) (+) Feelings of certainty/

security (+) joy/satisfaction

Former AustrianCo2 members: (N = 94

statements)

(5) (�) Resignation

(5) (�) Distrust

(�) tiredness, demotivation

(�) frustration� Positive management behaviour and

communication: 66%� Negative management behaviour and

communication: 34%Former GermanCo3 members: (N = 180

statements)� Positive management behaviour and

communication: 50%


communication: 50%

Note: (+), positive or pleasant emotion; (�), negative or unpleasant emotion.

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1998). The interviews were tape-recorded, transcribed, and converted into textual data and analysed, assisted by computersoftware.

The transcripts from the interviews were analysed with NVivo, a computer assisted qualitative data analysis softwarepackage (CAQDAS). NVivo can be seen as a digital filing system which enables researchers to perform sophisticated archivalviews, grouping and sorting activities (Richards, 2000). The crucial feature is that it helps in the process of coding the textualdata. Coding is the primary activity of analysis. It is an evolving process, an ongoing interpretation and examination of thetextual data from different perspectives. Data are initially examined to identify and name incidents that relate to phenomenaunder scrutiny. This discovery and identification process resulted in designated ‘concepts’ or ‘nodes’. For example, wheneverinterviewees reported on emotionally challenging incidents and commented on ‘anger’, that (part of the) sentence orparagraph was attributed to the ‘anger’ node.

In a second step, we summarised the nodes which expressed similar concepts in a dendrogram and applied a collectiveterm to the new categories. In building these categories we followed the structure of our conceptual framework, while thesub-categories were gathered in an inductive way that is typical of qualitative research (Glaser, 1978). For example, thecategories ‘management communication’ and ‘management behaviour’ (see conceptual section) represented tree-nodes andencapsulated various sub-categories which emerged only during the coding process. In a similar way, the tree-likerepresentation of nodes helped to distinguish between positive (e.g. pride, joy, trust, etc.) and negative emotions (e.g.anxiety, distrust, frustration, etc.) within the data.

While data were collected on all elements within the framework, the focus of the analysis here will be more on the M&A-emotion link than on the emotion-performance link. This is for are several reasons. First, the objective of our research was tocomprehensively explore the emotional dimension of mergers & acquisitions. Second, while our data include information onthe outcome variables (employee attitudes and behaviour) listed in Fig. 1, neither our textual data nor our qualitativeresearch approach allows for the analysis of direct cause-effect relationships concerning the impact of emotions on attitudes,behaviour, and ultimate success of the M&A. In addition, there are a myriad of other (direct) determinants of attitudes andbehaviour, which may relate to the work environment and to the M&A event, as well as to variables outside the merger andacquisition process.

3.2. Consolidated results

The first column of Table 1 provides an overview of the companies involved in the study, some descriptive informationabout them, and their M&A background. The second column of the table also highlights a summary evaluation of theapproach to management communication and behaviour during the M&A. This is based on numeric counts of statements(nodes in NVivo). An assessment regarding the impact of management communication and behaviour on employeeemotions is given in the third column.

3.2.1. Emotions

As can be seen from Table 1 (third column), the highest percentage of positive emotions emerged within ItalianCo1 andthe second highest percentage within ItalianCo2. The highest percentage of negative emotions was mentioned byGermanCo1 members and the second highest by AustrianCo3 members. In the latter case, it is interesting to note thedifference between former AustrianCo2 and former GermanCo3 members. Members of the acquired company GermanCo3felt more negatively about the merger(s) than members of the acquiring partner AustrianCo2. In summary, we can state thatmembers of the acquiring companies (i.e. ItalianCo1, ItalianCo2 and AustrianCo2) felt much more positive about the M&Athan members of the weaker, acquired companies (i.e. GermanCo1 and GermanCo3). However, it would be anoversimplification to imply that acquiring companies generally demonstrate more positive emotions. When comparing thepercentage of positive emotion statements between ItalianCo1, ItalianCo2 and AustrianCo2, we see a variation from 56% to45% and 34% respectively. This implies that not only the acquirer/acquiring situation accounts for emotional well-being, butalso–and more importantly–the way how the M&A process is managed

3.2.2. Emotion awareness

Another interesting finding is the fact that awareness of emotions (i.e. expressed attitudes towards emotions) wassignificantly more frequent amongst interviewees of companies where negative emotions were predominant. Across thefour M&A cases, 65% of all interview statements regarding emotions stem from GermanCo1 members, 22% from AustrianCo3members, and only 7% and 6% from ItalianCo2 members and ItalianCo1 members respectively. We conclude that peopledominated by negative emotions are more aware of their emotional state and experience a stronger urge to reflect and talkabout emotions than other people

3.2.3. Management behaviour and communication

It is conspicuous that in companies in which managerial behaviour and communication were perceived very positively,statements regarding positive emotions were expressed more frequently than in companies where management behaviourand communication was perceived as less positive. For example, within ItalianCo1 85% of all statements about managementbehaviour and communication were positive, and 57% of all mentioned emotions were positive, too. Similarly withinItalianCo2, where 89% of the statements about management behaviour and communication were positive, 45% of all emotion


statements were positive. In comparison, within GermanCo1 only about half of the statements related to managementindicate positive behaviour and communication, and 78% of all emotions were perceived negatively. The situation is similarwithin AustrianCo3: 55% of management-related coding references are negative and only 31% of all emotions are positive.But it is again useful to distinguish between former AustrianCo2 and former GermanCo3 members. Both, managerialbehaviour & communication as well as the experienced emotions are perceived more negatively amongst the GermanCo3members (50% positive management behaviour & communication, 28% positive emotions) than amongst AustrianCo2members (66% positive management behaviour & communication, 31% positive emotions)

3.2.4. Employee attitudes and behaviour

While employee attitudes and behaviour were not our main focus, the interviews also provided information on them. Asfar as employee identification with and commitment to the ‘new’ organisation are concerned, AustrianCo3 is informative.Two interviewees mentioned that after 10 years of integration activity, 80% of the workforce identified with AustrianCo3,while some of the others still differentiated between ‘us’ and ‘them’. Other issues were brand and product identification, andidentification with organisational culture. In-group favouritism was closely associated with negative emotions such asscepticism, mistrust, fear of exploitation or envy and jealousy toward the out-group, the partner company; it hindered thecreation of a common identity and organisational culture.

Employees who perceived managerial actions as unfair reacted with anger, disillusionment, frustration anddemotivation, as well as decreased organisational commitment, lower levels of job satisfaction, and subsequently jobwithdrawal. Employees who were happy with the pre-merger company experienced a sense of bereavement, and becamemore dissatisfied and less committed in the new company. Moreover, employee theft, absenteeism and turnover wereexplained as a coping mechanism adopted by unsatisfied employees.

Fear of job losses as well as grief, and anger about management were reported to have led to the deterioration inrelationships both between colleagues and between management and employees. In addition, lower levels of organisationalcitizenship behaviour and cooperation, shirking and slacking were perceived to occur. Jealousy led to power games, intriguesand harassment, and these in their turn led to employee turnover.

While the above consequences of emotions all reduce productivity, there is another aspect to consider. In order to come toterms with emotions, worrying and frustrated employees seem to require long coffee breaks and conversations with theircolleagues, and rumours increase. This, too, may negatively affect productivity and organisational performance.

3.3. Managerial communication and employees’ emotions

The percentages provided above give a first impression. However, counts of coded NVivo statements alone cannotsufficiently explain the relationship between managerial communication and behaviour on the one hand andemployees’ emotions on the other. This is why the following sections give explanations in form of descriptions andsummarise relevant interview statements. The structure of this and the subsequent section follows the integration ofthe conceptual framework with the inductive coding process in NVivo, therefore adding relevant sub-categories whichemerged from the interviews.

3.3.1. Communication in general

Informants unanimously acknowledged the overarching importance of communication. Managers and employeespointed to the significance of top-down information even before communication was explicitly raised as a topic in theinterviews.

Employees who were not actively involved in M&A decision-making processes but who were influenced by thesedecisions expected detailed and regular informational updates from their superiors. If no such information was available,implicit and non-verbal cues were used to decode information. The feeling that ‘something is going on’ was shared in theinterviews, although employees were often unaware of what the underlying phenomenon was.

If you’re sensitive, you realize what that something is seething there. Signals come from different sides. (I-14, §39)

3.3.2. The announcement

Some of the middle managers in our sample were involved in the due-diligence process, prior to the M&Aannouncement. Nevertheless, the official announcement was experienced as one of the most intensive emotionalevents in the M&A process. In each of our cases, the announcement took a different form. In one case, the merger wasannounced via e-mail and via the so called ‘Chairman’s Letter’. In two other cases, CEOs of the buying companyannounced the acquisition in big official meetings, which was held in the company canteen in one case, and at a ‘neutral’hotel location in the other case. In the fourth case, the CEO informed managers only, so that employees heard therumours in the corridor.

In cases where employees were completely unaware of the upcoming changes, their reactions demonstrated shock,disappointment and anxiety or delight, pride and optimism. The reaction depended on several factors: one aspect was the waythe announcement took place. Another issue was the image of the partner company. However, most important concerns inthis context were related to foreseeable career changes or job losses.


Where rumours spread prior to the official announcement, employees felt tense and insecure and were longing for anofficial explanation. Anxieties and distrust in management, but also curiosity, were typical reactions.

You wait trembling, ‘what will the guy now tell us?’ We had read a few things in the newspaper, but nothing concrete. And

most of us clung full of hope to the work’s meeting and the CEO’s words (I-6, §33).3

It can be very dangerous when there is a discrepancy between official news and informal messages. At GermanCo1sofficial M&A announcement, for instance, the GermanCo2 CEO proclaimed: ‘‘Never change a winning team. You aresuccessful and we are not going to change anything here at this subsidiary’’. However, some of GermanCo1s members werealready informed about their scheduled dismissals and therefore felt shocked, angry and irritated about this official version.They experienced utmost anxiety and desperation. Given the specific atmosphere of the meeting, employees were invitedbut did not dare to raise any questions.

I was also one of those who knew already that I would be dismissed. There from emerges great anger, of course. How can this

guy stand up and raise the others’ hope if there is no reason for hope? This was for us lots of anger and somehow also a

demotivation. (I-6, §§23-24)

3.3.3. Communication frequency and intensity

Interviewees reported that the level of information differed a lot between individuals within their organisations. Theamount of information was related to the position held by the staff member. Furthermore, it was also seen as a function ofpersonal relationships with superiors. Several interviewees raised uncertainty about whether their superiors weresufficiently informed about the merger or the acquisition. However, whenever it was felt that the superiors were inpossession of more information than they passed on, people started to be suspicious and to distrust their managers.

In the beginning we were informed a lot (. . .) and then there were periods in which you did not hear anything anymore. And if

you hear nothing at all, you start to be very suspicious. (I-12, §32)

Interestingly, all interviewees (with two exceptions) in a position of having at least one hierarchy level above themselvesreported not to have been informed ‘properly’ by their superior(s). On the other hand, the interviewees holding a leadingposition (i.e. top and middle managers) were convinced that they had communicated intensively and frequently with theirsubordinates. This apparent gap in perceptions raises interesting questions about the differences in expectations concerningleadership communication and behaviour and about the self-image of management.

3.3.4. Top-down communication

A perceived lack of official top-down information incites rumours amongst employees and correlates with feelings of

uncertainty and other unpleasant emotions such as fear, anger, frustration, demotivation, or hopelessness. Sixteen statementsin the interviews clearly confirmed the link between poor managerial communication, employees’ uncertainty and thespreading of rumours leading to demotivation and to lower productivity.

Such news goes of course very fast around the company. It spreads like a wildfire. Lots of negative energy grew out of this.

And people talked a lot about it, instead of working productively. (I-12, §32)

Interviewee statements further confirmed that open and honest information was the best strategy to reduce unpleasantexperiences and rumours.

Emotions were also triggered by newspaper articles. They were a source of irritation, anxiety and fear, aggression, rage,jealousy, de-motivation, grief, or arrogance. Employees expected managerial reaction and explanation after disturbing mediareleases. However, this was not always provided, and so emotional turmoil was further increased. Public media releases notonly affected employees; they also frightened and irritated employees’ families, potential job applicants, clients, andshareholders.

Then we read about those stories in the newspapers. They sounded very bad. They talked about mass dismissals and bank

disasters. At the time we would have appreciated to hear something from the management floor about what really was going

on. This caused a feeling of considerable uncertainty among the colleagues. You were thinking ‘how are things about my job?’

Lots of anxieties resulted from these articles. (I-12, §32)

3.4. Managerial behaviour and employee emotions

Interview statements confirmed the enormous impact of the managers’ leadership behaviour on employees’ emotionsand subsequent employee attitudes and behaviour. The GermanCo1 case evidences this relationship very clearly.Interviewees reported that the atmosphere at the post-acquisition stage was markedly different between two departments

3 In order to maintain the anonymity of the interviewees, numbers were assigned to all interviews. The notation ‘I-6, §33’, for example, means that the

quoted citation stems from interviewee 6, paragraph 33 in the transcribed N*Vivo version.


where the manager was involved in downsizing. Although the managers held similar positions and were considered equal interms of their professional knowledge, they represented different personalities. One manager was an introverted individual,who was perceived as ‘quiet’, ‘distant’ and difficult to approach by his subordinates. Employees reported that he showed a‘poker face’ and nobody really knew how to interpret it. His reserved behaviour augmented employees’ uncertainties andspeculations. They felt frustrated and demotivated, started to look for other jobs and to steal office property, such as paintings,from the company.

In the other case, the head of department felt it was important to ‘show his hand’ and to inform members of staffappropriately. He was perceived as communicative and able to calm employees and to motivate them by openly talking tothem and by facing them with the reality. Due to his inclusive personality, the team glued together even more during thetough closing-down of their department. The group members gave their best for the company, and they still cultivate theirfriendship today.

This illustrates that emotions of employees and employees’ willingness to contribute to a successful organisationalchange depends on managerial behaviour. The following paragraphs will take a closer look at certain integration-relatedtopics like implementation of strategies, joint projects, social activities and dismissals.

3.4.1. Implementation of change

In three out of the four analysed M&A cases (AustrianCo3, GermanCo1, ItalianCo1), the implementation of the merger oracquisition developed very slowly and dragged on for many years. Delays in operations and productivity declinesextinguished inspirational thoughts and triggered negative effects like feelings of uncertainty, demotivation, frustration anddisappointment. The emotional disappointment emerged because the initial enthusiasm and joy about promising newdevelopments had not been converted effectively into managerial action (ItalianCo2, AustrianCo3). Consequently, the M&Adecision was increasingly criticized and perceived to have resulted in failure. Organisational commitment and jobsatisfaction deteriorated. Employees and managers looked and applied for jobs elsewhere.

3.4.1.1. Announcement of the M&A. The M&A announcement represented one of the most important elements in theorganisational change process. It was an indispensable but certainly not sufficient means to prepare employeespsychologically for the upcoming fundamental changes. The interviews demonstrated that there was a vital need for people toexperience positive changes – shortly after the M&A announcement – and see positive signs of organisational restructuring toappreciate potential benefits. They wanted to witness clear demonstrations of willingness, actions to confirm that the strategywas not simply vapourware, but that the decision-maker(s) effectively meant what they were saying.

In those cases when no managerial action followed the announcement, people felt increasingly desperate andexperienced a strong desire for managerial actions. Resistance against change often culminated in interpersonal conflicts, inbullying, plotting and scheming. Interview response suggested that immediate managerial action and interventions areappropriate and provide for the best long-term solution for all those who are affected. This is in line with the literature, whichsuggests aiming for fast implementations: ‘‘fairly rapid change is preferable to that which occurs over a long period of timeand so creates uncertainty’’ (Cartwright & Cooper, 1992, p. 173–174).

3.4.2. Preparatory and accompanying trainings

Marks and Mirvis (2001) compare the merger syndrome to an organ transplant and observe that the ‘surgical team’ aswell as the ‘transplant patient’ have to be prepared for the surgical procedure. In order to plan for a successful treatment, thepatient needs to be checked physically prior to the surgery, but there is also guidance regarding the patient’s psychologicalwell-being.

The management team within ItalianCo1 provided such psychological guidance and prepared managers and employeesfor the M&A, offering internal seminars and trainings, e.g. on communication and teamwork. Furthermore, in an attempt toovercome language barriers and improve communication with business and merger partners, ItalianCo1 managers wereinvited to enrol in French classes (in addition to their existing English, German and Italian lessons).

Indeed, several merging companies experienced language barriers as a problem. Intense emotions and disputes weretypical outcomes. In the case of AustrianCo3, for example, middle managers suffered from feelings of inferiority when theyfirst met colleagues from UKCo who were native English speakers.

The emotions were very intense at the kick-off meeting, when we first met colleagues from the partner company, and

everything was in English. There you realise that they are superior from a language point of view. Of course, they are native

speakers! (I-11, § 234)

Some people, for instance technicians and purchasing people, are steadily in contact with the French people. They are always

a few quarrels going on, because our people learn French and do speak English, German and Italian as well, while lots of the

French guys barely speak any English. If the conversation runs in French, then of course technicians are disadvantaged.

Psychologically, English would be the best middle course. (I-1, §34)

In a similar vein, some quarrels existed between technicians and purchasing staff from ItalianCo1 and FrenchCo, who didnot speak any foreign language. ItalianCo1 personnel–fluent in Italian, German and English–were obliged to communicate inFrench rather than in English, which they considered an appropriately ‘neutral’ business language, but this gave rise toperceptions of injustice.


3.4.3. Integration activities

Interviewee’s responses showed that it was essential to start integration projects such as joint projects or social eventsimmediately after the announcement. Quick and small achievements helped to motivate employees and made them feel

committed towards the newly merged company.

There were aggressions and anxieties, obviously. This happened in the period when people took each others’ projects away,

which stirred up lots of bad blood (feelings). You start to realise that they do not want to cooperate with us, but you see that

they [managers] send us into an arena where we tear each other apart - nobody gets anything out of this. I strongly believe

that it would have been certain managers’ job to interfere more strongly in that situation. (I-12, §65)

Successful integration activities also helped to remove feelings of insecurity, intergroup jealousy and fears. They diminishedaversions, reduced conflicts and raised hopes, increased happiness and pride. People were consequently more open to furtherchallenges because they realised that changes were not necessarily connected with unpleasant emotions.

. . . and would say: ‘They are not so bad at all, as we had assumed. This is really true!’ they are often small human problems for

which you don’t have to have a university degree. You just have to bring people together. (I-12, §148)

As the ItalianCo1 example demonstrated, a better integration between two merging companies can be obtained throughjob rotations. ItalianCo1 regularly sent staff-members to subsidiaries. Similarly, AustrianCo3 launched a ‘European Job-Rotation’ project. This helped people to familiarise themselves with new structures, adapt to organisational issues and gatherknow-how. Positive outcomes of these practices were improved relationships between members of the two companies, andimproved communication skills and practices.

Parties were also considered a good way to bring people together. ItalianCo1’s management team, for example, met oncea month with FrenchCo’s board of management and combined the formal meeting with social events such as a joint eveningat the ‘Oktoberfest’ in Munich. ItalianCo1s CEO was convinced that good relationships paid off and there was the generalperception that work-atmosphere had improved substantially as a consequence of these activities.

3.4.4. Convincing people

Inconsistencies between managerial communication and managerial behaviour irritate employees. For example, the useof a ‘war jargon’ during official meetings at AustrianCo3 did not comply with the cultural values laid out in the company’smission statement. People started questioning managerial trustworthiness. However, AustrianCo2 transferred manufactureof certain products from the Austrian headquarters to GermanCo3 at Lemgo in Germany. They also relocated their Germandistribution centre from Frankfurt to Lemgo. From a logistics perspective this was an inferior location, but it served as animportant symbolic demonstration of benevolence to the acquired company. ItalianCo1 purposefully advertised vacancies inlocal newspapers. This was very reassuring for employees and consistent with the corporate communication, and thus ithelped employees to feel secure about their jobs.

Even very minor symbolic demonstrations of benevolence can help to create trust, conviction and motivation. ItalianCo1’sCEO, for example, demonstrated to the FrenchCo-crew that he held the acquired company and its staff in high esteem. He leftFrenchCo’s board of management untouched, involving only French managers. As we have noted above, ItalianCo1’s CEOtook on only the vice-president’s role and he started to learn French. Interview response demonstrated that thisunpretentious behaviour earned him huge sympathies. At the first merger anniversary party, he was able to give a speech inFrench and FrenchCo members were impressed and enthusiastic.

Previously I hardly spoke any French. Well, I learned it. And I know exactly that I earned huge sympathies through this. At the

first anniversary party [. . .] I then made my speech in French, and they were totally enthusiastic. (I-3, §91)

3.4.5. Dismissals

Conspicuous differences regarding ‘language used’ were noticeable when analysing managers’ and employees’ interviewtranscripts. Managers tended to focus on overlaps in job functions after the M&A and generally talked rationally about jobdismissals. They used terms like ‘adaptations’, ‘adjustments’, ‘synergy effects’, ‘restructuring’, ‘clearing up’, ‘cost savings’,‘clean-sweeping activity’ or ‘early retirements’ as synonyms for dismissals. Employees frequently associated theannouncement of M&As with ‘mass redundancies’ and ‘dismissals of unproductive or older employees’. For those affected,dismissals were often a synonym for ‘existential fears’. Dismissals were often not only personal tragedies, but concerned thewhole family.

When employees hear about an acquisition they usually associate it with dismissals. Employees are completely frightened by

that. (I-3, §80)

Yes, employees talk a lot about it [the dismissals] - at the coffee machine, on the phone, during lunchtime. (I-12, §§117)

Next to anxieties due to the loss of income, typical psychological consequences ranged from feeling superfluous

through feelings of inferiority to depression – consequences which are also reflected in the literature (Appelbaum,Gandell, Shapiro, et al., 2000; Cartwright & Cooper, 2000; Gutknecht & Keys, 1993). These personal emotionalexperiences might be the reason why employees use more emotional expressions about job removals than non-affecteddecision-makers use.


One of the most difficult problems to cope with was the fact that the number of ‘required’ dismissals was usuallyannounced only after long periods of uncertainty. This was often a slow and exhausting period, because the dismissals werenot announced at once but one by one. People became increasingly frightened by such a procedure. It led to feelings of

uncertainty, anxiety, aggression and rage. People came up with worst-case scenarios and started to distrust management. Theyoften found themselves in a state of overexcitement where only egocentric perspectives were important. Employees talked alot about dismissals. Instead of discussing how to e.g. optimise operational processes or solve customer problems, employeesshared their anxieties, aggression and rage with their colleagues. It also happened that they started to speculate who would bethe next case for dismissal. Such statements were very dangerous, poisoned the organisational climate, and thus posed aserious problem.

Instead of discussing ‘how can we optimise the light-technique and how can we solve this problem for client X?’ they talk

about their aggressions, anxieties and rage. Even if there are only a few dismissals in a department, you talk about it; you

observe and look at who might be the next, who has no family, who is the oldest in the department and thus less efficient. . .

And then it might happen that people say: ‘You will be the next one; you are single and over 50.’ And this is very dangerous,

this is deadly serious! Therefore I repeat my creed for a real open communication and for always playing with open cards. (I-

12, §§117-18)

The owner of ItalianCo2 immediately announced that nobody would be dismissed and there was no need to befrightened. ItalianCo1 could even afford to hire additional employees without dismissals. In both cases people felt secure

and confident. It is evident that most of the M&As are not in such a fortunate position. However, it appears to be important tocommunicate in a timely and acceptable form. The HOW (procedural and interactional justice) seems to be even moreimportant than the WHAT (distributive justice) in such delicate topics. The announcement of dismissals had its mostpositive effects when it was honest, sensitive, and consistent with itself and with other messages, and in line withorganisational values. When managers signalled comprehension and compassion, and when they found the right words,this could already lift the depressing atmosphere and open new and motivating perspectives for those who were to bedismissed.

3.4.5.1. Support for the dismissed. Some companies had a relatively elaborate social plan, with redundancy payments fordismissed employees. The extent of financial compensation largely depended on governmental and trade union settlementsin the country concerned, on the power of the works council, and/or on the company’s ‘goodwill’. To come up with a goodsocial plan, however, did not necessarily imply that the organisation acted purely altruistically. Companies were alsointerested in avoiding the spreading of bad messages in the public. Nevertheless, in cases where employees had the feelingthat the ‘golden handshake’ was generous, the acceptance of the redundancies was higher and animosities against theemployer lower or absent.

In addition to financial compensation, some companies offered support in the job-finding process. This was partly thecase with GermanCo1, where managers with connections to other companies tried to find places for their redundantemployees. Indeed, people did expect support when they were dismissed – especially in cases where human values wereexplicitly emphasised by the company’s mission statement.

The literature frequently states the positive effect on organisational culture and the organisational climate of socialevents in general and farewell parties for leaving employees in particular (Cartwright & Cooper, 2000; Gutknecht & Keys,1993). Amongst the four M&A cases, there was no organised farewell party for people who left the company. The main reasonfor missing farewell events was the fact that the dismissals happened over time. Every few weeks, redundant people just‘disappeared’ from the scene.

In one of the GermanCo1 departments, the atmosphere was so bad that people did not even want to keep their traditionof small informal birthday parties. In other departments and companies, some particularly-involved line managersarranged small parties or an away-day on their own because they felt that a ‘good’ goodbye was appropriate. However, nextto these semi-privately organised farewell events people would have expected an official signal of appreciation and a‘thank you’.

The members of another division arranged for a final joint trip. In our division the work morale and team spirit was so low

that everything just drifted apart. I do believe that this was different for every division involved. It depends on the individual

person in charge. (I-6, §95)

3.4.5.2. Voluntary leave of the company. In the post-merger stage, the staff turnover rate goes up to 75% during the first threeyears after acquisitions (Cartwright & Cooper, 1995; Unger, 1986; Walsh, 1988). Typically, between 50% and 70% of keymanagers voluntarily leave acquired companies. The turnover rate or employees is generally lower but it can also reach 60%.Usually, people with the best educational background and the highest degree of know-how are the ones who get good offersfrom other organisations and prefer to go. This means a loss of talents and of know-how for the organisation (Cartwright &Cooper, 2000).

Interviews showed that companies were often unaware of their employees’ negotiations with other firms, especiallywhen inter-personal relationships between superiors and employees had deteriorated through the merger. There werevarious motives for ‘survivors’ to voluntarily give notice. One of the most frequently mentioned reasons was the fact that the


M&A integration processes were just taking too long. Many individuals were not willing to cope with uncertain and unstablejob situations, unpredictable career paths, no tangible progress and a deteriorating atmosphere over an extensive period.

The uncertainties grew; the internal working atmosphere became worse and worse. Within some small groups people

worked well with each other, but nevertheless they started to look for other jobs and to leave the firm. (I-7, §80)

This was often combined with mistrust regarding the future success of the newly-merged company and with substantialdisappointment regarding the merger and the way changes were managed.

The company was shaken up. For many persons this was very difficult, and many managers of the older generation could not

take this anymore and left. Within three, four years all of them were gone. In this sense, it was also a change of generation. Of

course, if you’re older, you are not able to adapt that easy to something new - suddenly all the officers got computers. And if

you are not able to keep up with the new technology, you have your problems. (I-14, §17)

4. Conclusion

The international boom in M&As of recent decades is characterised by high degrees of merger failure and negativeimplications for those affected (Buckley & Ghauri, 2002; Cartwright & Schoenberg, 2006; Schweiger & Very, 2001). Themainstream literature still perceives organisations as logical and rational entities; it fails to acknowledge that highly-emotional events such as mergers or acquisitions call for an increased awareness of psychological, cultural, and humanresource dimensions and for appropriate forms of managerial communication and behaviour (Kusstatscher, 2005, 2006;Stahl & Mendenhall, 2005). A qualitative approach was used to explore themes, discover patterns and improve theunderstanding of M&A related processes and situations. With this research, we aimed to reveal how managers behaveand communicate. We discover, identify and describe employees’ emotions and elaborate the effects of these emotionson employee outcome variables. As an extension of our work, future research could test the framework we develop inthis paper.

Drawing on cognitive appraisal theory and affective events theory, this paper analyses the single events of the mergersyndrome and introduces the emotional dimension of mergers acquisitions into a comprehensive framework. This approachallows an analysis of the relationship between management communication and behaviour, emotions as intermediarydimension and merger syndrome outcome variables. Our second contribution is the examination of the impact ofmanagement communication and behaviour on employee emotions and subsequent merger syndrome outcome variables.

4.1. Theoretical implications

We believe that the frequently cited ‘merger syndrome’ is a popular buzzword for a complex phenomenon whichemphasises the negative aspects of a merger or an acquisition. In this context, we propose emotions as an important link,which has received relatively little attention in the literature to date. As our understanding of emotions suggests, emotionsare triggered by perceived stimuli, i.e. managerial behaviour and communication, and they imply an action-readinessoutcome. This means that emotions felt by employees will have an important impact on their willingness to contribute to theM&A success. To this end, our study not only demonstrates that emotions are an important phenomenon in mergers andacquisitions, they may in fact be critical to M&A performance in domestic and even more so in international contexts (Very &Schweiger, 2001). While our research does not extend the previous psychological research related to the role of emotions inorganisations, it contributes to the vast and increasing literature on mergers and acquisitions generally and makes asignificant attempt to capture emotions in the domain of international business specifically. Based on our study we suggestan analytical framework, which can be used for establishing testable hypotheses for further research

4.2. Managerial implications regarding managerial communications

What constitutes ‘sufficient’ information and ‘frequent’ communication is only a subjective and individual perception andnot an objective fact. It does not count how much, how intensively and how open superiors really communicate with theirsubordinates. Given that perceptions create realities, only those things which are perceived by the recipient are important.Our findings indicate that specific attention needs to be given to the correspondence between (1) managementcommunication and management behaviour and (2) the assessment of the quality of communication by superiors andsubordinates

Regular, intensive and open communication throughout the whole M&A integration process is crucial. Interviews showedthat there is a connection between the managerial communication style (openness, honesty and frequency) and employees’positive/negative emotions. Bad news is considered better and less harmful for all those involved than no news anduncertainty. In periods of major change, such as a post-merger situation, employees need frequent and regular informationin order to feel secure. Simply having informed knowledge about what is going on has positive effects upon employees’feelings. By contrast, being kept in the dark about what is going on generates uncertainty and demotivation. Just simplereassuring sentences like ‘‘I don’t have any more information at the moment, but I will keep you posted’’ can help to setpeople’s minds at rest.


Findings also suggest that the importance of informal networks deserves more attention in general (see also Krackhardt &Hanson, 1993), and particularly during post-merger integration processes. During periods of major organisational changeand a high level of uncertainty, it is crucial for employees to have a superior whom they know well, whom they trust, whoprepares them for the changes and who informs them about the negative implications of those changes. In the post-mergercontext, the role of line managers is more important than literature suggests. This is especially the case for big organisations,where senior managers and owners are considered as too distant from employees.

4.3. Managerial implications regarding managerial behaviour

Despite the overarching importance of communication, there needs to be a clear correspondence betweencommunication and behaviour. People notice discrepancies and react with negative emotions and either resist the changeor withdraw. Messages must therefore be consistent and should be supported by tangible signs if they are to attain highcredibility. Employees expect strong leaders in the post-merger process. The findings of the empirical project clearly reveal acall for managerial action. Therefore implementation has to happen quickly. In case of inevitable dismissals, for example, it isfavourable to announce numbers and names of affected individuals immediately instead of leaving employees in uncertaintyand existential fears for months or even for years. These conclusions are in line with findings of other investigators (e.g.Cartwright & Cooper, 2000). Interview partners also emphasised the importance of concrete and visible common outcomesas soon as possible. This means that small and cross-organisational integration projects should receive high priority. Instantsuccess provides positive feelings and gratification for people’s efforts and it helps to convince them

For dismissed employees as well as for ‘survivors’, the crucial issue is to receive signals of appreciation regarding theircontribution to the company. The perception of sincere and honest attempts to support employees will increase the level ofcomprehension and acceptance of unpleasant changes. For this reason farewell parties, re-training, and assistance in job-search serve important functions.

M&As necessarily involve unpleasant decisions. However, the findings reveal that employees’ reactions mainly depend onthe way how bad news is communicated and how individuals are treated by the management. Purely ‘logical’ and ‘rational’communication of the reasons for merger is not always sufficient to convince employees. Avoidance or attempts to reducethe intensity of emotions does not help. Consequently, managers need to accept that emotions play a critical role in M&As.They have to develop an awareness of their own emotions and they need learn to cope with employees’ emotions. And it isimperative for superiors to realise how their words and behaviour will impact on co-workers’ emotions and employees’‘natural’ way to react. With this awareness it will be easier to manage communication and integration processes towardssuccess for all parties.

4.4. Limitations and future research

Access to companies was restricted to one side of the dyad (except for the AustrianCo3 case, where members of bothcompanies were interviewed). Given that the purpose of the study was a conceptualisation of emotions in M&As, this wasdeemed satisfactory. However, it might be valuable to direct future research towards an exploration of emotions andmanagerial communication and behaviour on both sides of the merging institutions. In this study, we did not differentiatebetween mergers and acquisitions, specifically between majority acquisitions, minority acquisitions and mergers betweenequals. It will be insightful for future research, both from a theoretical perspective as well as for the planning of successfulM&A integration strategies, to see whether the type of M&A will trigger different emotional states and how these feed backon employee attitudes and behaviour towards the M&A. Besides differences in mergers and acquisitions, Haspeslagh andJemison (1991) point at differences in the type of integration approach pursued by the company.4 This may lead to differentperceptions of emotions by employees. Future work is encouraged that takes a closer look at such differences by extendingthe sample to a set of companies that allows taking the integration approach into account in the analysis

There are at least two additional aspects future research could investigate in greater detail. The first concerns the specificcharacteristics and implications of cross-border M&As, a topic which has been to a large extend sacrificed to the emphasis onemotions. Second, although our research gives some indication about associations, directions, and causal relationships,further research could have a closer look at which emotions are associated with which types of management communicationand behaviour, possibly using survey data.

The measurement of emotions is a very difficult undertaking. Given the fact that our cases were retrospective studies ofemotions, perceptual measures of emotion were the only possible approach. Future research is encouraged to employ alongitudinal perspective where emotions can be measured concurrently along to the integration activities. Although difficultto implement practically (with respect to access to companies, support issues, and cost considerations), it would be a greatcontribution to measure emotions using psycho-physiological methods such as decoding of visual expression through videoanalysis, measurement of covert facial muscle activity via electromyography or measurement of heart rates. Future research

4 As noted by one of our reviewers, based on the need for strategic interdependence on the one hand and organisational autonomy on the other hand,

different types of integration can be defined (Haspeslagh & Jemison, 1991). Acquired companies that operate as a holding have the possibility to remain

rather independent and this may lead to different employees’ perceptions of emotions than acquired companies that are fully integrated.


is also encouraged to study emotions quantitatively. This could assist in empirically testing the suggested role of emotions asintermediary variables.

Acknowledgements

We gratefully acknowledge the supportive comments of Cary L. Cooper, Susan Cartwright and Richard Schoenberg onearlier versions of this manuscript. Furthermore, we acknowledge the constructive feedback received from IBR editor PervezN. Ghauri, two anonymous reviewers and participants of the CIBER research seminars at Manchester Business School.

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between merger and syndrome: the intermediary role of emotions in four cross-border m&as

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