Business & Law Research Network

Colliding interests in mergers and acquisitions

In recent years, the scope of interests to consider in mergers and acquisitions has increased significantly. This has been driven by new regulatory requirements. The different stakeholders have different interests, at times these interests can collide, or even conflict. Balancing these colliding and conflicting interests has become an increasingly difficult task for directors. Our research aims to explore how boards of directors can and should be balancing these diverse interests.

We explicitly choose for ‘colliding interests’. While the interests of different stakeholders might not immediately clash, many times they do not run parallel. They are brushing against each other, by sometimes overlapping, sometimes diverging or even in some cases running into direct conflict. Take for example an interest such as national security. This interest plays a role in foreign direct investments and could pose a hurdle to sell an enterprise to the highest bidder. Consider also the interests of financial investors, who want to exercise influence over the board after a merger or acquisition of a company, competing with the board that wants to execute its adopted strategy.

Our research focuses mainly on the following questions: which stakeholders can we distinguish in mergers and acquisitions? Which interests are involved and are these interests justified? In which ways are these interests executed and/or controlled? How are the different interests incorporated in the risk management of a company and to what extent is it possible to balance these interests?

Our researchers investigate the impact of these colliding interests, starting with the stakeholders and then turning to their interests, and focus on answering the above questions. We aim to make recommendations on how to best address these colliding interests in the area of mergers and acquisitions.