The primary purpose of this chapter is to offer a conceptual/theoretical
understanding of post-M&A integration rationales and/or actions
which pose a challenge to acquired firm customers in acquisitions of
knowledge-intensive firms, and thus trigger M&A value destruction.
The approach takes the form of a literature overview and conceptual
development. As a step toward developing a more elaborate understanding
of a customer-centered perspective, this conceptual study identifies
five key factors that may lead to value leakage/destruction for
acquirers’ of knowledge-intensive firms. Specifically, it identifies
acquisition motive, specific acquired firm employees other than the
engineers and scientists, size of the acquired firm customer-base,
M&A customer compatibility, and the acquirer’s own customers’
behavior as integration rationales and/or actions which pose a challenge
to acquired firm customers. In addition, the chapter offers a
theoretical framework that serves as an analytical tool, and can thus be
used as a foundation for future empirical work on analyzing acquirers’
destruction of value in knowledge-intensive acquisitions through the
neglect of acquired firm’s customers. This study does not claim to have
provided exhaustive list of all factors regarding acquirer’s integration
rationales and/or actions that influence acquired firm customers.
Nonetheless, for researchers seeking to build a more comprehensive
framework relating to the impact of acquirer’s integration rationales
and/or actions on acquired firm’s customers, this framework may serve as
a solid foundation for achieving that goal. For practitioners, this
study points to the importance of knowledge held by acquired firm
customers and the need to maintain such customer relationships in order
to avert acquirer’s post-M&A value destruction. In addition,
acquirers may also recognize that post-M&A integration changes
required following M&A should not be restricted to only the firm’s
internal activities and resource deployment but should extend to how the
firm interacts or relates with other external value creation actors.
This chapter contributes by highlighting and stimulating a discussion on
the important role of acquired firm customers in acquisitions of
knowledge-intensive firms in informing our understanding of the sources
of M&A value leakage/destruction.