Chapter 2: Mergers and Acquisitions in Eastern Europe: Intercultural Issues in the Automotive Industry

Merger and acquisition (M&A) is a way to survive and succeed in a competitive global environment as a consequence of new political, monetary and regulatory issues. The complex phenomenon that M&As represent has received consistent attention from the research community over the last 30 years.

M&As are a strategic choice to grow quicker, enter new markets and maximize companies' capabilities, which otherwise would not have been possible. Within the automotive industry, this phenomenon has been seen repeatedly with examples like Mitsubishi-Daimler, Jaguar-Ford, Daimler-Chrysler, Seat-Volkswagen, Daewoo-General Motors and Land Rover-Ford. Although M&A activity has trended directionally consistent with automotive assembly volume, there are some failure cases within automotive industry M&As (e.g., Rover-BMW). In this chapter, the focus is on the intercultural issues of the M&A phenomenon. The underestimation of the cultural factors has significant impact on why M&A operations sometimes fail to achieve the predefined goals.

It is of vital importance for the automotive companies to understand and be aware of these intercultural issues in order to be successful in their merger or acquisition.

The phenomenon of M&A within the automotive industry needs further research and discussions due to the fact that some strategic alliances and M&A proved to be successful (e.g., Škoda-Volkswagen) and others not (e.g., Rover-BMW).