What is M&A performance?

This paper examines the concept of acquisition performance, proposing a model linking task-, transaction-,and firm-level constructs under different time horizons and testing it with a unique dataset created by surveying partners and directors of a major consulting firm advising on the postacquisition integration process of 146 acquisitions across industries and geographies. Results of factor and structural equations analysis reveal that (a) M&A performance is a multifaceted construct; there is no one overarching factor capturing all the different ways used to proxy it, (b) there is a path linking integration process performance to long-term firm performance (both accounting and financial returns) via customer retention and overall synergy realization, and (c) short-term window event studies are not linked to any of the other performance metrics. Implications are drawn and recommendations made for theory development, research design, and data analysis in future studies of acquisition performance, as well as for practicing managers.