Struggling mergers and acquisitions and their external relations : SAS Braathens

Abstract

Mergers and acquisitions (M&A) have become a highly popular form of corporate development. The research in the M&A field is extensive, but there is a lack of research regarding how external relations are affected when the M&As do not work out as planned, and whether competitors can win if the M&A fails. This study explores whether and how an M&A that struggles affects its external relations. The study was conducted using a case study of a well-known, struggling Norwegian M&A: SAS Braathens, and the external relations examined were the competitors, the customers, and the media. The main finding of this paper shows that an M&A that struggles can affect its external relations negatively. To what degree the external relations will be affected, depends on the change in market structure and the market share of the M&A, how differentiated the products in the industry are, existing substitutes, and if the struggling affects the public or not. Further, this paper finds that the main reasons for SAS Braathens struggle can be traced back to poor communication and the management.