Bridging Borders: Exploring Impacts of Cultural Differences on Achieving Cross-Border M&A Harmonization - A Case Study

Sammanfattning: Cross-border M&A has become a popular strategy for firms to enter new markets. Even though the advantages of cross-border M&A are well known, it is important to gain a deeper understanding of the procedure. Therefore, our study aims to add to the body of knowledge by examining the variables that affect the harmonization of cross-border M&A. To accomplish this goal, a single case study methodology will be used, with a focus on the M&A process and the contribution of culture to harmonization. Another key aspect that aligns with the cultural dimension is the relationship between the headquarters and subsidiaries and its subsequent impact on the process. Additionally, this study seeks to advance scholarly knowledge on a relatively novel phenomenon: the attainment of legitimacy in the region through local sourcing following the completion of M&A. Our findings emphasize the significance of culture and the strategies employed to facilitate cultural assimilation, including adjustments in the HQ-subsidiary relationship to streamline information flow. Furthermore, our findings suggest that local sourcing serves as a critical instrument for achieving local legitimacy, thereby reducing the cultural distance between the acquiring and target firms. This study is limited to a single case study within the F&B industry in developing countries. As such, the generalizability of our findings is limited to cross-border M&A occurring in similar contexts.