Reframing Mergers and Acquisitions around Stakeholder Relationships Among the significant repercussions of the coronavirus pandemic is escalating public questioning of the desirability and sustainability of the market economy and the societal role of business. These concerns are linked to merger and acqui- sition (M&A) activity, with significant disruptive consequences for stakeholder relationships and their management. This book explores these changes, moving away from the traditional focus on the financial and strategic aspects of M&A and its rational, technocratic approach. Viewing M&A activity as economic, political, and social (EPS) processes, Se- gal provides a dialectic understanding of stakeholder relationships around M&A activity and challenges the view that M&A activity is static, linear, and predict- able. He develops a conceptual framework to enable practitioners, researchers, and policymakers to identify, understand, and address the stakeholder and man- agement implications of M&A activity. This is applied to four case studies that make explicit how complex stakeholder relationships play out around M&A and how these power dynamics were managed with different balances. Useful for academics, researchers, managers, advisors, investors, analysts, and other stakeholders, this book highlights the need to understand the EPS impli- cations and processes involved around M&A. Simon Segal covers M&A as a journalist/editor/commentator. He was awarded his PhD in 2021 for a thesis titled “Understanding and managing dynamic stakeholder relationships around mergers and acquisitions.” He started the Aus- tralian bureau of Mergermarket in 2005, was Australia bureau chief and editor of Dealreporter Asia, and is currently Editorial Consultant at Dealreporter and a director at Mergermarket Australia. James Guthrie AM is an Emeritus Professor of Accounting at Macquarie Busi- ness School, Australia. He has published 220 articles in international and na- tional refereed and professional journals and over 50 books or chapters in books. John Dumay is Professor in Accounting and Finance at Macquarie Business School, Australia. He previously worked for over 15 years as an independent business consultant, beginning an academic career in 2008. Routledge Advances in Management and Business Studies Hospitality and Tourism Education in China Development, Issues, and Challenges Edited by Jigang Bao and Songshan (Sam) Huang Halal Logistics and Supply Chain Management Recent Trends and Issues Edited by Nor Aida Abdul Rahman, Azizul Hassan and Zawiah Abdul Majid Sustainable International Business Models in a Digitally Transforming World Edited by Anshuman Khare, Arto Ojala and William W. Baber Cross-Cultural Challenges of Managing ‘One Belt One Road’ Projects The Experience of the China-Pakistan Economic Corridor Arshia Mukhtar, Ying Zhu, You-il Lee, Mary Bambacas and S. Tamer Cavusgil Digital Transformation and Innovation in Tourism Events Edited by Azizul Hassan Reframing Mergers and Acquisitions around Stakeholder Relationships Economic, Political and Social Processes Simon Segal, James Guthrie and John Dumay Managing Manufacturing Knowledge in Europe in the Era of Industry 4.0 Justyna Patalas-Maliszewska For more information about this series, please visit: www.routledge.com/ Routledge-Advances-in-Management-and-Business-Studies/book-series/SE0305 Reframing Mergers and Acquisitions around Stakeholder Relationships Economic, Political and Social Processes Simon Segal, James Guthrie and John Dumay First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 Simon Segal The right of Simon Segal to be identifed as author of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identifcation and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Segal, Simon (Journalist), author. Title: Reframing mergers and acquisitions around stakeholder relationships : economic, political and social processes / Simon Segal with contributions from James Guthrie and John Dumay. Description: Milton Park, Abingdon, Oxon; New York, NY: Routledge, 2022. Identifers: LCCN 2022002297 (print) | LCCN 2022002298 (ebook) | ISBN 9781032207803 (hardback) | ISBN 9781032207810 (paperback) | ISBN 9781003265184 (ebook) Subjects: LCSH: Consolidation and merger of corporations. | Stakeholder management. Classifcation: LCC HD2746.5.S448 2022 (print) | LCC HD2746.5 (ebook) | DDC 658.1/6—dc23/eng/20220121 LC record available at https://lccn.loc.gov/2022002297 LC ebook record available at https://lccn.loc.gov/2022002298 ISBN: 9781032207803 (hbk) ISBN: 9781032207810 (pbk) ISBN: 9781003265184 (ebk) DOI: 10.4324/9781003265184 Typeset in Galliard by codeMantra Contents List of illustrations vii Acknowledgements ix 1 Introduction 1 2 Causes and consequences of M&A 16 3 Economic, political, and social implications and processes around M&A 25 4 Stakeholder approach to M&A 34 5 A conceptual stakeholder framework around M&A 45 6 Who are the stakeholders around M&A? 52 7 Balancing stakeholder relationships around M&A 75 8 The Tatts–Tabcorp merger process 87 9 The abandoned United Airlines and US Airways merger 104 10 Acquisition of Vin & Sprit by Pernod Ricard 111 11 Collapse of Fortis 117 12 Conclusion 127 Index 131 Illustrations Figures 5.1 Stakeholder typology: one, two, or three attributes present (Mitchell et al., 1997: 874) 48 5.2 Stakeholder potential to threaten the merger process 49 Tables 5.1 Stakeholder relationship framework 45 7.1 Balance template of stakeholder relationships 76 8.1 Regulator and PRA relationships during the Tatts–Tabcorp merger process 88 8.2 Balance of regulator and PRA relationships during the Tatts–Tabcorp merger process 98 9.1 Employee and regulator relationships around the UAL–US Airways merger proposal 105 9.2 Balance of employee and regulator relationships around the UAL–US Airways merger proposal 109 10.1 Stakeholder relationships around the Vin & Sprit sale to Pernod Ricard 112 10.2 Balance of stakeholder relationships around the Vin & Sprit sale to Pernod Ricard 115 11.1 Stakeholder relationships around the collapse of Fortis 119 11.2 Balance of stakeholder relationships around the Fortis collapse 125 Acknowledgements This book is the culmination of over 16 years as a specialist M&A journalist/ editor/commentator and a PhD thesis “Understanding and managing dynamic stakeholder relationships around mergers and acquisitions.” My journey has been inspired and enriched by my work colleagues, PhD supervisors Professor John Dumay and Distinguished Professor James Guthrie (AM), and network of source contacts in the M&A world. In the end, the parts became a whole, as my good friend Associate Professor Steven Segal has taught me “like a jigsaw puzzle, as the parts began to emerge the whole began to take shape and as the whole began to emerge it became easier to see how the parts stood in relationship to each other.” It goes without saying that the book would not remotely have happened with- out all their continued willingness to offer insight, wisdom, and support which I certainly appreciate and respect. I hope our dialogues continue. Holding me through all the excitement and turbulence has been my wife Le- ora, never allowing me to get too intense or serious about the task, and children Zac and Chloe, now embarking on their own careers – yes starting in M&A! – and well able to offer their fresh insight to an old man long passed it! Finally, I have led a blessed life from higher forces with loving and supportive parents Mervyn and Gill who would take such nachos (pride) in my progress against many odds. Take comfort that while I do not have the answers, I have much more to offer around the questions and that this book is a ftting tribute to them.