Groups that Suffer the Merger and Acquisitions Activity’s Consequences

Groups that Suffer the M&A Activity’s Consequences
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Groups that Suffer the M&A Activity’s Consequences
Although most mergers and acquisitions (M&A) activities cause benefits and drawbacks, some company stakeholders or groups experience more drawbacks than benefits. The first group consists of employees. Mergers or acquisitions often lead to workforce modifications through practices like layoffs, company restructuring, or employee relocation. Also, the acquiring or merged firms might eradicate duplicate departments or roles, stimulating job losses for workers (Malikov et al., 2021; Krishnan & Park, 2002). Employees may encounter newly defined roles in cases without immediate job reductions, which can affect their morale or job security.
Secondly, suppliers also suffer due to M&A practices. Zarb and Noth (2012) investigate if a relationship between company mergers or acquisitions and the supply chain exists and establishes potential effects. The M&A processes can trigger significant changes in terms and conditions, preferences, and contracts affecting suppliers. Some suppliers might experience the dangers of losing long-term cooperation with the acquired or merged company if it decides to restructure their supply chain or find other suppliers. Mesarić et al. (2015) also note possible theoretical supply chain impacts due to M&A, likely to ruin supplier cooperation with the firm(s) involved.
Local communities also face low moments after M&A activities. Most literature conclusions claim that takeovers affect employment adversely (Pendleton, 2016). When a merger or acqu...