Advances in Mergers and Acquisitions by Cooper Cary L.;Finkelstein Sydney;

Author:Cooper, Cary L.;Finkelstein, Sydney;
Language: eng
Format: epub
Publisher: Emerald Publishing Limited
Published: 2021-07-07T16:00:00+00:00

THREE DIMENSIONS OF MARRIAGE

Sequence of Events

We commonly associate marriage with a number of sequences or steps, both before and within marriage: dating, engagement, wedding, and so on. The length of these sequences may vary both in number and in time. Ideally and traditionally, a marriage lasts until death. To illustrate how different sequences in a merger process can be compared with those of a relationship leading up to marriage, Eastman and Lang (2001, p. 103) point to a number of stages preceding the merger. There are three basic stages of a merger. The first stage comes about through a decision to discuss the possibility of a merger (Discussions begin). This stage consists of negotiations between the merger partners. When a decision to merge has been taken (Agreement reached), the merger partners enter the transition stage where plans are made and the merger is prepared. When the actual merger is realized (Consummation), the merger partners enter the implementation stage as a single new legal entity. Just like a merger, steps to get married can be described as going through different stages. Two people meet and courting (negotiations) begins. They start dating. When an agreement to marry has been made (proposal), they enter the engagement (transition) stage where plans are made and the wedding is prepared. When the couple is married (wedding), they enter the marriage (implementation) stage as a single new legal entity. Just as couples enter into marriages full of hope and good cheer, businesses enter into mergers, acquisitions, joint ventures and partnerships full of optimism, and plans for a rosy future (Schmidt, 2002, p. ix). Although a construction, concepts related to specific stages are used by M&A researchers, for example, courtship (Walsh, 1989) and dating (Al-Laham, Schweizer, & Amburgey, 2010), signaling a process of time that precedes the corporate marriage. Another example is taking the step from friendship to a romantic relationship. In this case, a relationship exists but the character of it changes. This also applies to mergers where some develop from a previous alliance.

Until relatively recently, a common idea of marriage was that it lasted until death. For many, this is still the ideal and part of the very idea of marriage. Without further reflection, this is probably the case when the marriage metaphor is used in M&A too. A company is a going concern, but we all know that a subsidiary or part of the organization can be divested, and other events may occur. Relating it to polygamy (see section on number of partners), new partners may enter the scene shortly after the first marriage was proclaimed (Schweizer & Lagerström, 2014).

Vance, Fery, Odell, Marks, and Loomba (1969) likened a merger to phases preceding and during a marriage. They suggested that if the courtship phase, the marriage ceremony, the honeymoon, and the phase after the honeymoon were handled properly, the merger would be more likely to succeed. In the literature, the metaphorical use has also contained other aspects of marriage, for example, communication as way of getting to know each other before you take things to the next level.

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