Post-acquisition organizational and portfolio restructuring and performance: Empirical evidence of acquired companies in the Republic of Serbia
Abstract
This paper examines the impact of post-acquisition restructuring on performance, based on a sample of Serbian acquired companies during the period 2002-2011. Using exploratory factor analysis, two new factors of post-acquisition restructuring on performance were identified: the first one refers to organizational restructuring, and the second factor refers to portfolio restructuring (divestitures). By using multiple regression analysis, we tested the impact of organizational and portfolio restructuring on post-acquisition performance. The results of analysis indicate that organizational and portfolio restructuring do not have statistically significant impact on post-acquisition performance. Additionally, the results have shown that there are statistically significant differences on implemented activities of organizational restructuring between manufacturing and service sectors. Organizational restructuring was implemented to a greater extent in companies belonging to manufacturing sector than in companies belonging to service sector.
References
Atiase, R., Platt, D., & Tse, S. (2004). Operational restructuring charges and post-restructuring performance. Contemporary Accounting Research, 21(3), 493-522
Bates, T.W. (2005). Asset sales, investment opportunities and the use of proceeds, Journal of Finance, 60(1), 105-135.
Billet, M., & Vijh, A. (2004). The wealth effects of tracking stock restructurings. Journal of Financial Research, 27(4), 559-583.
Bowman, E., & Singh, H. (1993). Corporate restructuring: Reconfiguring the Firm. Strategic Management Journal, 14(1), 5-14.
Brickley, J., & Van Drunene, L. (1990). International corporate restructuring: An empirical analysis. Journal of Accounting and Economics, 12(1-3), 251-280.
Capron, L., & Guillen, M. (2009). National corporate governance institutions and post-acquisition target reorganization. Strategic Management Journal, 30(8), 803-833.
Capron, L. (1999). The long-term performance of horizontal acquisitions. Strategic Management Journal, 20(11), 987-1018.
Colombo, M., & Rabbiosi, L. (2010). Technological relatedness, post-acquisition reorganization and innovation performance: looking inside the black box. Paper presented at the Summer Conference „Opening Up Innovation: Strategy, Organization and Technology“, Imperial College London Business School. Retrieved from http://www2.druid.dk/conferences/viewpaper.php?id=502047&cf=43 .
Crum, R., & Goldberg, I. (1998). Restructuring and Managing the Enterprise in Transition, EDI Learning Resources Series, World Bank, Washington. Retrieved from http://documents.worldbank.org/curated/en/1998/07/693466/restructuring-managing-enterprise-transition .
Das, B., Raskhit, D., S., & Debasish, S. (2009). Corporate Restructuring – Merger, Acquisition and Other Forms. Mumbai: Himalaya Publishing House.
Datta, K. D. (1991). Organizational fit and acquisition performance-effects of post-acquisition integration. In A. Risberg (Ed.), Mergers and Acquisitions A Critical Reader (pp.53-69). Routledge Taylor & Francis Group, 2006.
Datta, D. K., & Grant, J. H. (1990). Relationships between type of acquisition, the autonomy given to the acquired firm, and acquisition success: An empirical analysis. Journal of Management, 16(1), 29 – 44.
Denis, D., & Kruse, T. (2000). Managerial discipline and corporate restructuring following performance declines. Journal of Financial Economics, 55(3), 391-424.
DePamphilis, D. (2010). Mergers, acquisitions, and other restructuring activities- integrated approach to process, tools, cases, and solutions (5th ed.). London: Elsevier Inc.
Eckbo, E., & Thoрbuрn, K. (2008). Corporate restructuring: breakups and LBOs. In E. Eckbo (Ed.), Takeover activity, valuation estimates and mergers Gains- Modern Empirical Developments, Elseiver Inc.
Erić, D., & Stošić, I. (2013). Korporativno restrukturiranje, Beograd: Institut ekonomskih nauka, Beogradska bankarska akademija, Čigoja.
Erić, D., Stošić, I., & Redžepović, S. (2011). Restructuring of public enterprises as source of increasing competitiveness in Serbia and South-Eastern Europe region. Paper presented at 8th International Conference – Economic integrations, competition and cooperation, section 13-Western Balkans; trade, cooperation and EU integration perspective. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2232730 .
Gaughan, A.P. (2002). Mergers, acquisitions and corporate restructurings (3rd ed.). Hoboken, New Jersey: John Wiley & Sons.
John, K., & Ofek, E. (1995). Asset sales and increase in focus. Journal of Financial Economics, 37(1), 105–126.
Lai, J., & Sudarsanam, S. (1997). Corporate Restructuring in Response to Performance Decline: Impact of Ownership, Governance and Lenders, European Finance Review, 1(2), 197-233.
Larsson, R., & Finkelstein, S. (1999). Integrating strategic, organizational, and human resource perspectives on mergers and acquisitions: A case survey of synergy realization. Organization Science, 10(1), 1-26.
Maksimovic, V., & Phillips, G. (2001). The market for corporate assets: Who engages in mergers and asset sales and are there efficiency gains? Journal of Finance, 56(6), 2019-2065.
Maksimovic, V., Phillips, G., & Prabhala. N. (2011). Post-merger restructuring and the boundaries of the firm. Journal of Financial Economics, 102(2), 317-343.
Maxwell, W.,& Rao, R. (2003). Do spin-offs expropriate wealth from bondholders? Journal of Finance, 58(5), 2087-2108.
Meyer, K., & Lieb-Doczy, E. (2003). Post-acquisition restructuring as evolutionary process. Journal of Management Studies, 40(2), 459-482.
Nikolić, I., & Kovačević, M. (2014). Efekti privatizacije – empirijska analiza i rezultati na srpsku industriju, Industrija, 42(1), 63-86.
Ravenscraft, D., & Scherer, F. (1987). Life after takeover. Journal of Industrial Economics, 36(2), 147-156.
Savović, S. (2012). Značaj postakvizicione integracije za kreiranje vrednosti i uspeh merdžera i akvizicija. Ekonomski horizonti, 14(3), 193-205.
Schijven, M. (2005). Curing the firm's indigestion: organizational restructuring and dynamics of acquisition performance. Academy of Management Best Conference Paper 2005, BPS:M1, Honolulu, HI, USA.
Stošić, I. (2014a). Korporativno restrukturiranje preduzeća u svetu i Srbiji, Poslovna ekonomija, 8(1), 157-176.
Stošić, I. (2014b). The challenges of defining and implementing corporate restructuring programs, Economic Themes, 52(2), 139-153.
Uhlenbruck, K. (2004). Developing acquired foreign subsidiaries: the experience of MNEs in transition economies, Journal of International Business Studies, 35(2), 109-123.
Xia, J., & Li, S. (2013). The divestiture of acquired subunits: a resource dependence approach. Strategic Management Journal, 34(2), 131-148.
Zollo, M., & Singh, H. (2004). Deliberate learning in corporate acquisitions: Post-acquisition strategies and integration capability in US bank mergers. Strategic Management Journal, 25(13), 1233-1256.