Abstract
Mergers have become a generally accepted solution to a broad set of managerial problems in practice. However,research on mergers and acquisitions provides a rather sceptical view as to the success of mergers in solvingbusiness problems. The current paper aims at investigating the public discourse on mergers and acquisitions andits relation to the scientific discourse. The public discourse is studied by an analysis of Swedish media reports onthe Astra Zeneca merger. More specifically we study the actors given voice in the discourse, the temporalevolution of the discourse and the arguments voiced. We conclude that the discourse is dominated by journalists,managers and financial analysts who all generate arguments based on a rather narrow “efficiency theoretical”basis. This is in conflict with current insights in research on mergers and acquisitions that has proposed morevalid and complex models for understanding mergers. The reasons and consequences of this discrepancybetween the public and the scientific discourses are discussed.
Highlights
The current paper aims at investigating the public discourse on mergers and acquisitions and its relation to the scientific discourse
The current paper focuses on this seeming discrepancy between the public discourse and understanding of mergers as a broad remedy to organizational problems and the scientific research, pointing at all kinds of challenges related to realizing potential positive effects of mergers
We aim at shedding light on the nature of the public discourse on mergers as reflected in the business press and how this relates to the scientific discourse on mergers as reflected in scholarly research
Summary
A majority of theories focus on shareholders’ interests (i.e. efficiency theory, monopoly theory, raider theory, and valuation theory) while a smaller group of theories focuses on managers’ interests and their deviations from shareholders’ interests in value maximisation (empire-building theory). Theory interprets mergers as planned strategic action to achieve market power that creates a wealth transfer from customers to the owners. This explanation holds for horizontal acquisitions and its advantages have been referred to as ‘collusive synergies’ (Chatterjee, 1986) or ‘competitor interrelationship’ (Porter, 1985). Empire-building theories describe mergers as planned and executed by managers trying to maximise their own utility instead of their shareholders’ In this approach, managerial goals are the explanatory factor behind a merger. Trautwein (1990) further uses the label Raider theory for a possible merger motive discussed especially in the business press This motive focuses on wealth transfer from the target’s shareholders. The transfer includes greenmail or excessive compensation to the raider after a successful take-over
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