Five essentials for successful merger integration: what the aerospace and defense industry knows

• Published in: The Journal of business strategy Vol. 42; no. 5; pp. 304 - 314
• Main Author: Voth, Jeffrey M
• Format: Journal Article
• Language: English
• Published: Boston Emerald Publishing Limited 25.08.2021; Emerald Group Publishing Limited
• Subjects: Acquisitions & mergers; Aircraft; Case studies; Defense industry; Divisions; Electronics; Executives; Leadership; Market positioning; Missiles; Organizational change; Shipbuilding; Stockholders; Strategic planning; Success factors; Surveillance; Value creation; United States > US; Megaprojects; Post-merger integration; Megadeals; Value creation; Mergers and acquisitions; Aerospace and defense
• ISSN: 0275-6668; 2052-1197
• DOI: 10.1108/JBS-02-2020-0045

Purpose This paper aims to offer an original analysis of how three of the largest aerospace and defense (A&D) companies equipped their organizations for merger integration success. Design/methodology/approach Through a multi-case study, this paper explores the post-merger integration process for large-scale transactions completed over a 25-year period. Semi-structured interviews were conducted with industry executives and leading management consultants. The process involved collection of primary data, analysis of secondary data drawn from publicly available company documents and identification of key factors that led to success. Findings Five interdependent success factors (Figure 1) support integration teams and capture deal value. Managing the process as a megaproject further facilitates the effectiveness of post-merger integration, enabling leaders to remain laser-focused on integration activity while driving toward a long-term vision for the newly formed organization. Practical implications Merger integration has been identified as a primary source of deficiency that prevents acquirers from achieving anticipated results, negatively affecting merger success. Based on the findings of this paper, firms are more likely to create a compelling long-term value creation agenda when five essential factors are combined with a megaproject approach to manage the post-merger integration process. Originality/value This study advances current knowledge in the field by responding to requests to further explore the dimensions of merger integration that facilitate success and improve shareholder value, contributing new data to inform extant theories regarding merger integration and megaproject management and adding to the limited research on post-merger integration within the A&D industry.