Much of the M&A literature has focused on the negative consequences of acquisitions for target employees. They may anticipate layoffs or cuts in pay, benefits, and training. Research has also highlighted how valuable human capital resources may often decide to leave post-acquisition to avoid the disruption that the acquisition and post-merger integration bring to their career. Consequently, one might expect post-acquisition investments in human capital to be rare or unwise. We draw on a unique sample of acquisitions in Belgium which includes detailed data on human capital investments (formal and informal training and compensation) before and after the acquisition. Our findings indicate that post-acquisition investment increases, both for compensation and training, when the deal rationale involves revenue growth or buyers are in unrelated industries. Notably, in our sample, the vast majority of buyers pursue growth-oriented objectives so human capital investment occurred most of the time. We also offer a more nuanced discussion breaking out different kinds of revenue growth strategies. Overall, our study advances research on acquisitions and strategic human capital.
