Proceedings of the 3rd European Conference on Intellectual Capital

Transformational Leadership in Mergers and Acquisitions
Transactions in Emerging Markets. Case Study <strong>of</strong> <strong>the</strong> Bere
Mures Acquisition by Heineken Romania
Sorin Anagnoste 1 and Gabriela Dumitru 2
1
The Academy <strong>of</strong> Economic Studies, Bucharest, Romania
2
AT Kearney, Bucharest, Romania
Sorin.anagnoste@gmail.com
Gabriela.dumitru@atkearney.com
Abstract: Mergers and acquisition have become attractive options in <strong>the</strong> last years in emerging markets being
driven not only by a financial attractiveness point <strong>of</strong> view but also seen as a strategic investment movement.
However, leadership styles are key determinants <strong>of</strong> <strong>the</strong> success or failure <strong>of</strong> such transactions. Leadership, a hot
topic with impact in day-to-day business life, is usually taken for granted, and despite <strong>the</strong> fact that most <strong>of</strong> <strong>the</strong>
times <strong>the</strong> general principles are applied, <strong>the</strong> key cultural dimension is <strong>of</strong>ten forgotten. The aim <strong>of</strong> this paper is to
report <strong>the</strong> findings <strong>of</strong> an empirical study exploring <strong>the</strong> existence and relationship between seven variables <strong>of</strong>
transformational leadership (values, vision, optimism, innovation and change, trust, motivation and emotional
intelligence) and to lay out <strong>the</strong> strategy <strong>of</strong> a company to gain competitive edge by means <strong>of</strong> an acquisition case
study in beer industry. Companies need <strong>the</strong> appropriate levers if <strong>the</strong>y are to maintain <strong>the</strong>ir positions in <strong>the</strong>
market, should imply as much as possible <strong>the</strong> local resources, should adapt to <strong>the</strong> customs and traditions <strong>of</strong> that
country or region and one <strong>of</strong> <strong>the</strong> most important findings is that leaders create leaders.
Keywords: transformational leadership, mergers, acquisitions, emerging markets
1. Introduction
Nowadays we see leadership in everything around us, from family members to businesses and
brands (Northouse, 2007) and that is why we decided to take a look <strong>of</strong> <strong>the</strong> transformational leadership
perspective into mergers and acquisitions in beer market in an emergent economy to see, both, <strong>the</strong>
usage <strong>of</strong> leadership and <strong>the</strong> way a merger and acquisition is a model <strong>of</strong> success through it.
The beer market is Romania is evaluated at 1 billion EURO and <strong>the</strong> main four players (SAB Miller,
Heineken, INBEV AG, Carslberg) have 95% <strong>of</strong> <strong>the</strong> market share.
We wanted to find out if <strong>the</strong> main transaction in <strong>the</strong> Romanian beer market was an acquisition
planned or forced by <strong>the</strong> competitors and see <strong>the</strong> importance <strong>of</strong> <strong>the</strong> transformational leadership in <strong>the</strong>
people involved in this transaction. When it comes to leadership it is very important to stress out that
leadership has a nonlinear nature and is an integrator much more powerful than technologies or its
associated processes being a generic and flexible integrator <strong>of</strong> intellectual capital (Bratianu el al.,
2007).
2. The basics <strong>of</strong> mergers and acquisition
Companies never stop searching for sources <strong>of</strong> pr<strong>of</strong>itable growth, whe<strong>the</strong>r organic (hiring additional
salespeople, developing new products) or inorganic (firm acquisition). M&A can provide a stimulus to
growth, enable market dominance in a slow growth market, enlarge geographical/product/domain
footprint or also provide opportunities for enhancing <strong>the</strong> bottom line through better synergies and
reduced overheads. The drivers <strong>of</strong> mergers and acquisitions can be very different depending upon <strong>the</strong>
industry and firm specific factors; however, growth is <strong>the</strong> dominant driver <strong>of</strong> M&A:
Acquirers usually pursue a merger to cut costs and create growth opportunities. The aim is to
establish or broaden <strong>the</strong>ir presence in high-growth markets, so <strong>the</strong>y are constantly on <strong>the</strong> lookout for
acquisitions with growth prospects. Ano<strong>the</strong>r reason could be to gain access to production and new
technology. This strategy pushes expansion plans by broadening <strong>the</strong> customer base and increasing
market share (Ro<strong>the</strong>nbuecher and Hoyningen-Huene, 2008).
Throughout <strong>the</strong> process <strong>of</strong> merger and acquisition negotiation <strong>the</strong>re are a set <strong>of</strong> instruments and
activities that are performed: while <strong>the</strong> company willing to expand is developing a short list <strong>of</strong> potential
candidates, on <strong>the</strong> o<strong>the</strong>r side <strong>the</strong> targeted company is performing a market screening to have an idea
about what could be <strong>the</strong> market potential. The next step is defined as an understanding point from
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