The Precursors of Post -Mergers and Acquisitions Failure in Zimbabwe’s Public Listed Companies

Abstract

This research sought to evaluate the precursors of post-mergers and acquisition (M&A) failures in Zimbabwe’s public listed firms. The study combined two research designs, namely descriptive and exploratory research designs. Findings of this study concluded that four predictors variable of organisational culture mismatch, poor strategic rationale, pre-merger mis-valuations and poor integration plan were valid and consistent to predict post-merger and acquisition failures in the sampled firms. In addition, post-merger and acquisition performance of firms was positively and significantly affected by organisational culture mismatch, poor strategic rationale, pre-merger mis-valuations and poor integration plan. It also emerged from the study that some mergers and acquisitions in Zimbabwe failed because the management gave little attention to pre-merger valuations of target firms, failing to pay attention and match the organizational culture of the two merging firms or fusion of the corporate cultures, giving little or no attention to integration and poor strategic rationale. These variables were also found to be correlated with each other suggesting multicollinearity of the variable. The study recommended that management should pay attention to a fusion of organisational cultures, strategic rationale, pre-merger valuations and post-merger integration planning. Thus, for mergers to be successful, there was a need for proper planning, due diligence in pre-merger valuations, good fusion of corporate culture and proper integration strategy. The study recommended that, with more time and resources, future research could conduct extensive qualitative research to explore deeper insights on post M&A failures taking into consideration mediating variables such as political, economic, social and legal variables.