Nomura Research Institute, Ltd. (NRI: Tokyo, Japan; Akihisa Fujinuma, President, CEO & COO) has conducted an online “Survey of Employee Attitudes to M&As” in November 2006, targeting company employees. The results of the survey are outlined below. These results indicate that, among the respondents, those with experience of an M&A strongly feel the possibility of their companies becoming subject to a hostile takeover and they would nevertheless favor such action, especially in comparison to persons with no such experience.

Persons who have experienced an M&A are much more aware

While the lifting of the ban on “triangular mergers,” which is scheduled for this year, might lead to an accelerating trend toward cross-border M&As, the results of this survey clearly reveal a difference in attitude between those persons who have experienced an M&A and those who have not.

Among those with experience of an M&A, 70.1 percent believe that M&As will frequently occur in the industry in which they work in the future (those who responded with “currently occurring frequently and will continue to occur in the future” or “will frequently occur in the future”), while among those with no experience of an M&A, 35.6 percent believe so (Figure 1). While 44.7 percent of those with experience of an M&A feel that their company might be subject to a hostile takeover (those who responded with “very much think so” or “think so”), only 9.9 percent of those with no experience of an M&A feel so (Figure 2).

Little feeling of resistance towards hostile takeovers

The survey also revealed that those persons who responded that they would be “in favor” of the company in which they work being subject to a hostile takeover accounted for 13.7 percent of those who had had experienced an M&A and 3.7 percent of those who had not. In contrast, 27.4 percent of those persons with experience of an M&A would “oppose” a hostile takeover, as would 38.9 percent of those with no experience of an M&A (Figure 3).

When we asked those persons with experience of an M&A and who said that they would be “in favor” for the reasons for their responses, the most common answer we received was “current management needs to be changed” (52%). In addition, when we questioned those persons who responded with“would depend on partner or post-merger conditions” what they would have to see achieved in order to be in favor, the majority responded with “better treatment and benefits for employees after merger” (60.5%) and “personnel continue to be employed after merger” (54.4%).

When the respondents were asked what kind of company they would like to see attempting a hostile takeover of their company, 53.7 percent of those with experience of an M&A answered “a company operating in the same field,” as did 49.9 percent of those with no experience of an M&A.

Around 60% of persons with experience of an M&A support M&As and believe that M&As have achieved their goals

When we asked those persons with experience of an M&A how they felt when their companies announced their M&A plans, 56.6 percent said that they were “in favor” or “basically in favor” (Figure 4). Also, when questioned about the degree to which the M&A had achieved its purpose, 59.7 percent felt that their “expectations had been exceeded” or their “expectations had been met” (Figure 5). Regarding their reasons for this, the most common response was “merger was completed in a short time” (36.0%) followed by “leadership of top management was fully implemented” (31.2%). In contrast, when those persons who felt that the results “fell short of their expectations” were asked for their reasons, the most common response was “leadership of top management was inadequate” (41.1%). This clearly indicates that leadership of top management is a major point in determining whether an M&A is seen as being successful.

[For general inquiries, please contact the following:]
Yukako Seto / Ai Ohara
Corporate Communications Department
Nomura Research Institute, Ltd.
Tel: +81-3-6270-8100
E-mail:

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[Reference]
・Overview of survey
"Survey of Employee Attitudes to M&As"

Survey date:	November 25 to 27, 2006
Survey method:	Online (using NRI’s TRUENAVI Internet research service)
Respondents:	2,002 company employees (898 with experience of an M&A, 1,104 with no such experience)

Figure 1

Do you think M&As will occur frequently in the industry in which you currently work?

Figure2

Do you think that your company could be the subject of a hostile takeover?

Figure 3

What would be your reaction if your company were to be the subject of a hostile takeover?

Figure 4

How did you feel when your company announced its M&A plan? (N = 898)

Figure 5

How successful was your company's M&A relative to the original goals? (N = 898)

Figure 5-1

Factors leading to a successful M&A (top 3 of multiple answers, N=536)

Figure 5-2

Factors suggesting the reasons for failure of an M&A (top 3 of multiple answers, N=227)

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