Managing M&A Risk Through the Lense of ERM: A Case Study Exploring the Role of Enterprise Risk Management in the Dow-DuPont Merger

Abstract

This thesis investigates how Enterprise Risk Management (ERM) principles can inform and enhance risk governance in mergers and acquisitions (M&A), and what implications this has for broader M&A risk management. Traditional M&A risk practices often rely on siloed due diligence processes and focus primarily on legal and financial exposures. However, such approaches are frequently inadequate for addressing the complex, strategic, and interdependent risks that characterize large-scale M&A transactions. Academic literature has yet to explore in depth how ERM, originally developed as a firm-wide governance model, can be conceptually applied across the full M&A lifecycle. To address this gap, this thesis applies ERM as an analytical framework in a qualitative case study of the $130 billion Dow-DuPont megamerger. The analysis draws on interviews with practitioners involved in M&A execution, as well as ERM professionals, to evaluate how ERM principles could improve the identification, assessment, prioritization, treatment, and oversight of M&A-related risks. The findings demonstrate that: (1) ERM enables a strategic reframing of M&A risk governance, embedding risk awareness into decision-making, integration planning, and performance management; (2) ERM improves prioritization and treatment by introducing portfolio-based reasoning and distinguishing between risks to be mitigated and uncertainties that can be strategically exploited; (3) ERM strengthens governance structures through clearer ownership, escalation pathways, and alignment with risk appetite across the deal lifecycle; (4) Institutional and behavioral barriers, including siloed structures, symbolic adoption, and internal politics, can constrain ERM’s transformative potential, underscoring the need for cultural and leadership alignment. The thesis contributes to the emerging literature on risk-informed strategy by demonstrating how ERM can bridge the gap between compliance-driven risk practices and strategic value creation in M&A. It concludes that when supported by organizational commitment, ERM offers a robust foundation for navigating the complexity and uncertainty inherent in transformational transactions.