Never Give Up! How to Respond Effectively to Post-M&A Failure with a Recovery Strategy

Abstract

Existing literature has investigated how to approach post-merger and acquisition (M&A) integration right after the deal, but has been relatively silent on how to recover from a failed post-M&A several years after the deal. We fill this theoretical lacuna by examining an initially failed merger of a leading biotech company (Amgen) with an Italian pharmaceutical firm (Dompé Biotech). By relying on a unique combination of restricted material, face-to-face interviews, and private and public data, we show how the new entity—Amgen Italy—devised a recovery strategy that not only produced task and human integration and a positive organizational climate but also exceeded financial performance targets, seven years after an unsuccessful merger. Our data show that a post-merger recovery process requires socialization, disambiguation, and alignment, and we suggest some specific operational mechanisms to implement such a process. Our study contributes to the literature on post-merger integration by defining and characterizing the process of recovery after a failed M&A.