Mergers and Acquisitions Across Cultures

80 Pages Posted: 16 Mar 2014 Last revised: 28 Apr 2021

See all articles by Muhammad Farooq Ahmad

Muhammad Farooq Ahmad

SKEMA Business School – Université Côte d'Azur

Eric de Bodt

NHH-Caltech

Helen Bollaert

SKEMA Business School

Date Written: April 28, 2015

Abstract

We examine the effect of acquirer country culture on the cross-cultural (as opposed to cross-border) acquisition decision, the influence of social integration on this cross-cultural decision and the effect of the acquirer's culture on bid premium and probability of deal completion. We classify acquirer and target countries into GLOBE culture clusters. Sedulity-oriented and tradition-oriented cultures are less likely to acquire outside their home culture cluster, and greater social integration between acquirer and target countries mitigates this reluctance. Sedulity (tradition) oriented cultures pay lower (higher) bid premiums in cross-cultural transactions and are more (less) likely to complete them.

Keywords: Mergers & Acquisitions (M&As), Culture Clusters, Cross-Cultural M&As, M&A Deals Completion, Cultural Dimensions

JEL Classification: G34, M14, Z1

Suggested Citation

Ahmad, Muhammad Farooq and de Bodt, Eric and Bollaert, Helen, Mergers and Acquisitions Across Cultures (April 28, 2015). Available at SSRN: https://ssrn.com/abstract=2409308 or http://dx.doi.org/10.2139/ssrn.2409308

Muhammad Farooq Ahmad (Contact Author)

SKEMA Business School – Université Côte d'Azur ( email )

Campus de Lille, Avenue Willy Brandt,
Lille, 59777
France

HOME PAGE: http://sites.google.com/site/mfarooqahmad85

Eric De Bodt

NHH-Caltech ( email )

18B AVENUE BECHET
Kraainem, 1950
Belgium
+32 475 24 01 69 (Phone)

Helen Bollaert

SKEMA Business School ( email )

Avenue Willy Brandt
Euralille, 59777
France

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