American Automotive acquires and merges with BarcelonaBrand Auto. What seemed to be a great strategic deal turns out to be an integration nightmare. What could have gone wrong with this merger in such a short time?
Given the multiple disciplines involved in this case, the learning objectives can vary depending on the angle taken by the lecturer. However, the following key learning objectives can be defined: 1. Understand the importance of national cultures in international management in general and in the context of a merger in particular. 2. Understand how different leadership styles can affect the merger between two organizations. 3. Analyze a business model and understand the organizational structures needed to support it (including how differences in business models can affect mergers). 4. Critically evaluate the value of an acquisition offer, and the consequences that has in setting expectations for the success of the merger. 5. Understand the differences between the corporate cultures of a public listed company and an entrepreneurial firm.
Based on field research; 6 pages.
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This case is about the merger & acquisition (M&A) process between American Automotive, Inc. (Smiths) and BarcelonaBrand Auto, Inc. (BBA). While the case is written in a fictional style, it is inspired by a real story with many similarities to what is portrayed. The case takes place within the automotive components industry and describes an acquisition and later merger between a much larger company, based in the USA, selling standard automotive components and a much smaller company based in Spain, selling customized automotive components for the luxury segment. What seemed to be a great strategic deal turned out to be an integration nightmare highlighting the importance of understanding national and company cultures, different leadership styles, deal valuation and specific distinctions in business models in M&A. The key question of the case is: what had gone wrong in this merger in such a little time?
