Acquisition motives and Shared Acquisition integration in Azerbaijan Case Study

Abstract

FDI motives and acquisition integration process in Emerging markets have been studied in past decades extensively in the context of MNCs. Since there is great differences among Emerging countries, Commonwealth of Independent Countries (CIS) were studied however minimally. The study studied both FDI motives and factors influencing acquisition integration process in Azerbaijan’s non-oil sector made by MNC. Market seeking, resource seeking and efficiency seeking FDI motives shaping MNC’s decision to undertake acquisition in Azerbaijan were studied by this study. Market growth and potential of the sector and availability of natural resources and raw materials were paramount drivers on the decision of the case study company to invest in Azerbaijan. However, efficiency seeking motives of this study were insignificant and were not among major factors affecting acquisition investment.

To complete the empirical part, in depth case study was conducted on Holcim group, which made the biggest non-oil investment in Azerbaijan’s economy. Semi-structured interviews were conducted with the managers of Holcim’s Azerbaijan unit.

National and organizational culture differences between acquiring and acquired unit being impediment for the successful acquisition integration was not supported by the study. Thus, even if there is a cultural misfit between acquiring and acquired companies, the ability of acknowledging this diversity and using necessary tools can significantly increase the success rate of the acquisition. By focusing on pre-acquisition phase, taking into account the role of human factor in acquisition and using effective social integration mechanisms, it was possible not only to overcome this challenge, but also to speed up the integration process.