Integration and Synergy Generation in Cross Border Acquisitions: A Case Study of Business Failure and Success ‘Made in Japan’

Abstract

This article seeks to advance international business researcher and practitioner insights into processes of cross-border mergers and acquisitions. Specifically, this article highlights the extent to which processes of strategic integration might impact positively and / or negatively on the long term business performance of the newly formed firm during the post-acquisition period -a measure of performance we refer to here as 'synergy'. In methodological terms, this article develops a mixed-method case study approach, generating, analysing and interpreting empirical data designed to illustrate processes of strategic integration implemented by senior managers at a Japanese firm, Nippon Sheet Glass (NSG), after its acquisition of a UK firm, Pilkington. The case study is longitudinal, drawing on quantitative and qualitative data gathered and analysed between 2006 and 2017. Applying a combination of event study methodology to an iterative analysis of business performance data along with coded analysis of data from in-depth interviews with key stakeholders, this article explores the extent to which strategic integration can both 'fail' in terms of achieving synergy and -for a number of generalizable reasons proposed in this article -ultimately 'succeed': for example, in cases where the acquiring and acquired firms attempt to integrate their human resource management systems while benefitting from investments of 'patient' capital, which (we propose) might be a distinctive feature of cross-border acquisitions sourced in Japan.