Post-merger integration in Arla: The Dutch SBU

Morten Pagh-Rasmussen & Mikkel Santos Galschiøt

Student thesis: Master thesis

Abstract

This master thesis is the ending assignment, before obtaining a master degree within strategy, organization and leadership at Copenhagen Business School. The subject of the master thesis is mergers and acquisitions and post-merger integration. The thesis is centered on the Danish/Swedish dairy cooperative Arla’s acquisition of the Dutch Friesland Foods Fresh, May 4th, 2009 from the dairy giant FrieslandCampina and seeks to explore the integration effort following the acquisition. The analysis will draw on both M&A theory and change management. It is found pertinent to single out four areas of focus, when establishing the theoretical framework and when subsequently performing the analysis. These four areas are integration strategy, integration guidance, cultural integration and employee integration. Within these four categories, the theories used in the thesis suggest more specific action points. The most important points are: Creating a strong and compelling vision, motivation, empowerment, and inclusion of employees in central aspects of the integration process, structural and strategic changes, the preserving of organizational identification, continuity, creation of project teams and installing a sense of urgency. The empirical data is gathered through interviews with key personnel from the Dutch SBU and two Arla representatives in charge of the integration, and the analysis provide insight into how Arla management and local Dutch management have managed the integration process in relation to the theoretical framework. In short, it is found that the SBU has been allowed a great deal of autonomy in both the formulation and execution of the new value-added strategy. The local management team has communicated extensively to the employees of the SBU about the integration process and this has helped to create projected continuity, despite the substantial strategic changes that have been made. The commitment this has spurred has to some extent been offset by Arla’s failure to assure finalization of pension-contracts and Arla HQ’s lack of urgency. This is an issue emphasized by several SBU managers. However, the interviewed Arla representatives do not seem to attach significant importance to it. Perhaps a deliberate choice on the part of the Arla representatives, no major changes have been made in the structure and work organization of the SBU.

EducationsMSc in Strategy, Organization and Leadership, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2011
Number of pages179