M&A and Employee Turnover: Who’s Leaving?

With the worldwide growth of mergers and acquisitions (M&As), a number of studies in recent years have called their relative success into question. One reason for the poor performance of a number of deals may be negative employee reactions, such as employee turnover. Despite the widespread perception that M&As often lead to employee turnover, there is surprisingly weak empirical support provided in the literature. In particular, we know notably little regarding the characteristics of those who are departing. In this study, I address this gap by using a unique dataset resulting from the merger of Bureau Van Dijk’s Zephyr M&As database and Danish register data. Additionally, I explore the heterogeneous effect of different types of M&As across employee groups. I find that M&As generally increase the probability of employee turnover, particularly for employees with relatively low human capital. Nevertheless, the effect varies significantly for different types of M&A.