M&A in The Banking Industry– Cultural Suitability and Compatibility as Drivers to Improve Synergy Realization
Given the accelerating consolidation and the increasing number of M&A transactions in Germany’s banking industry, this paper aims to analyze an essential driver of synergy realization and to extend prior work to improve the success rate of M&As. An insufficient focus on cultural suitability and compatibility and the corresponding subsequent Post-Merger Integration (PMI) is one of the main reasons that the expected synergies have not been achieved after the M&A integration projects. Complex organizational changes such as M&A transactions lead to a change in the culture, organizational identity, and corresponding relationships. This affects different cultural dimensions and requires organizational learning. While current M&A research in the literature shows a macro-level theoretical foundation in specific fields, relevant micro-level research on cultural suitability and compatibility has not been sufficiently conducted. This study relies on a sample of 263 online survey responses from M&A transactions of the banking industry in Germany, including cross-border transactions. The research strategy follows a quantitative approach, an empirical study with primary data gathered from an online survey with experienced M&A project and change managers. Multiple and polynomial regression analyzes, as well as structural equitation model(SEM), are applied. The study is highly relevant for both the academic world as well as decision-makers responsible for M&A transactions, as the results provide an in-depth understanding of synergy realization to gain new insights and improve M&A success rates, while differentiating and looking at the specifics of the German banking groups including cross-border M&A transactions.
Keywords - M&A, Mergers & Acquisitions, M&A Synergy Realization, Post-merger Integration, PMI Success Factors, Cultural Suitability, M&A Complementarity