Sweetening the Logistics: Drivers of Logistics Synergy Realization in Horizontal M&As - The Case of the Cloetta and Leaf Merger

Abstract: The increasingly competitive climate has caused companies to pursue counteractive strategies such as M&As in the hope to attain synergy potential. However, M&As are associated with a high failure rate and synergy realization is often unsuccessful. One area poorly covered in previous literature and often unattended by merging parties is synergies within logistics, despite its significance for merger success. The aim of this thesis is, consequently, to contribute to increased knowledge of logistics synergies in horizontal M&As and realization of these, in order facilitate horizontal M&A success. Existing literature on the subject is summarized and visualized by the development of a theoretical framework distinguishing key parameters for potential synergy realization. The application of the theoretical framework on the case study of the Cloetta and Leaf merger reveals that the companies have significant synergy realization potential. The high synergy realization potential is derived from a high combination potential along with a high level of integration. The empirical results supports the fact that combination potential and integration are important factors, however, employee resistance is evident in the Cloetta and Leaf merger and is considered to have a negative impact on synergy realization potential. Furthermore, employee resistance seems to increase with a high degree of similarities and when the relative size of the companies is big. After applying the framework, certain areas of improvement were distinguished suggesting that a complete framework for potential synergy realization and the subsequence of affecting factors is missing in existing literature. Therefore, the empirical findings were compiled into a revised framework, the Potential Logistics Synergy Realization Framework. The framework builds on existing literature together with the key findings from the case study and aims to better describe what factors affect potential logistics synergy realization.