Cross Border Alliances: An Opportunity or a Guarantee of Failure in Normal Business Life and Crisis? The Cases of Air France-KLM and Renault-Nissan Technology

In the new context created by the C19 pandemic, international business has been brutally stopped. Various Nationalist fear and reactions have leaded to frontiers closure and traveling restrictions. Since the early days of 2020, airlines and airplane businesses seem, more than others sectors, deeply threatened. How airline big networks have resisted. Could it be that Cross borders do better than single companies? This crisis provides an interesting opportunity for assessing Cross border Merger and Alliances. Since the 1960s, mergers and acquisitions – and especially cross border alliances - have been associated with lowered productivity, higher absenteeism, worse strike records and lower innovation power rather than higher profitability (Kitching 1967; Cartwright and Cooper 1996; Renneboog 2019). Some economists even argued that 50 to 80 percent of all cross border mergers and acquisitions are considered to be financially unsuccessful and do not create any value (Schenk 2008). Nevertheless, the numbers of international alliances, mergers and acquisitions remained and are still high (UNCTAD data 2019). Many economists and other social scientists have tried to fathom this paradox. Why are so few international alliances efficacious and valuable for different stakeholders? In particular, mergers between firms that originate in different business systems were more complicated than the amalgamation of firms with similar institutional and cultural background (Van Oss 2009). In most cases, these recipes did not result in a major breakthrough in the success-failure ratio of cross border alliances or to a decrease of the number of international contracts closed. This paper compares two cross border alliances (of firms operating in different cultural and institutional settings) that were rather successful. The first case highlights deals with the alliance of Renault and Nissan (1999). The Second Highligths the merger of Air France and Royal Dutch Airlines in 2004.