Customer reactions to acquirer-dominant mergers and acquisitions

• Published in: International journal of research in marketing Vol. 28; no. 4; pp. 332 - 341
• Main Authors: Thorbjørnsen, Helge, Dahlén, Micael
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.12.2011; Elsevier Sequoia S.A
• Subjects: Acquisitions; Acquisitions & mergers; Brand; Brands; Consumer attitudes; Consumer behavior; Consumers; Marketing management; Mergers; Reactance; Studies; Acquisitions; Reactance; Brand; Mergers; Consumer behavior
• ISSN: 0167-8116; 1873-8001
• DOI: 10.1016/j.ijresmar.2011.05.005

This article investigates consumer reactions to acquirer-dominant mergers and acquisitions (M&As) from the perspective of the (smaller) target brand and explores how marketing actions can mitigate negative effects. The findings from five studies show that consumers tend to react negatively to M&As by devaluing the acquirer brand, increasing their intention to switch, and adjusting their attitudes toward the target brand upward. We suggest that psychological reactance is a mediator of the negative effects of merger information on customers' attitudes and switching intentions. We also demonstrate that brand managers can attenuate reactance by involving consumers in merger decisions, thus providing important managerial implications for M&A decisions and processes. ► We investigate target brand customers' reactions to M&As. ► Five experiments reveal negative reactions among target firm customers. ► Psychological reactance is a key mediator of the effects. ► Strategies for attenuating reactance are tested and reported.