Mergers and Acquisitions

Chapter 6

Executive Turnover and Postmerger Performance

I was a person who didn’t drink. To be an executive in the acquiring firm (alcoholic beverage company) and not drink was a no-no. I was told that if I didn’t drink at corporate functions, I would never fit in.

After several months, I was replaced as vice president of marketing and given a desk job. Six months later, I was told to take a retirement package or a 40% cut in salary that year, which would be followed by another 33% salary cut the following year. The message was clear. After 35 years with the company, I quit.

—Vice president of a company acquired by a beverage firm, describing why he left 1 year after the acquisition

Does Executive Turnover After an Acquisition Leadto Lower Performance? ...