Trust in Mergers & Acquisitions - A Case Study on the Formation of Trust in the Integration Process

Abstract: While research has been focusing on the human side of mergers and acquisitions (M&A’s), research on trust specifically is still an emerging field. Conducting M&A’s and integrating companies introduces major changes for the acquired employees, making trust a critical factor to consider and to conduct research upon. In order to gain an in-depth understanding of the phenomena of trust, we studied the 2016 acquisition of the American company California Oils by Swedish AAK, two companies operating within the value-added ingredients industry. We aligned ourselves with the interpretivist paradigm and conducted an exploratory study using qualitative methods, such as semi-structured interviews of AAK senior and executive management staff close to the acquisition and integration process. Stahl et al’s (2011) analytical framework was used, where data analysis codes consisted of relationship history, process variables, ability, integrity & benevolence, openness, interfirm distance, culture, and value congruence as well as job security, perceived benefits, and social controls to assess how trust was established by the acquiring company’s management. The findings revealed that job security and perceived benefits must be addressed both at speed and with quality, suggesting that the contemporary framework by Stahl et al (2011) must find a way to incorporate these findings, which in turn will enable practitioners to establish trust in the integration phase of future M&A deals.