1. Introduction
In times of an increasingly globalized and competitive economy more and more companies merge in order to acquire new technologies, create economies of scale and establish global brand presence with the outcome of gaining a competitive edge over competitors.
Yet, many mergers fail. Difficulties in combining and managing an enlarged product portfolio and a larger customer base, as well as aligning two corporate cultures lead to failure of mergers. Cultural differences between merging companies are estimated to account for 30‐60% of failed mergers
(Deloitte, 2010). Knowing this fact the following question arises: which are the critical factors in integrating the culture of merging companies?
The aim of this essay is to identify these factors and present an approach to integrate cultures.
As a basis literature explaining the importance of cultural aspects within mergers and methods to merge culture will be reviewed. From the literature review the main factors for a successful merge of culture will be identified. In the following section two practical examples of mergers will be examined. Adidas and Reebok as an example of a successful one successful and Daimler and
Chrysler as a failed merger will be analyzed. The different cultures of the merging companies, their approaches to integrate cultures and the outcome of the integration will be illustrated. The following section the business cases will be analyzed and compared using the framework found in section 2. Lastly a conclusion will be drawn on the insight on cultural integration obtained through literature review and the case studies.
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2. Cultural Aspects of Mergers & Acquisitions – Literature Review
In order to create a theoretical background on factors of success and failures of Mergers and
Acquisitions literature will be reviewed in this section.
2.1. Definitions
To begin, definitions of the main topics of this work are provided in this section: merger, acquisition and corporate culture.
Merger
A merger is the joining of companies of relatively equal size to create a new company.
Law (2008b) defines mergers as “[a] combination of two or
