Why Mergers and Acquisitions Fail?

Abstract

This chapter tries to identify and inculcate few of the major reasons for failures of M&As. The probable reasons for failure have been extensively covered with various examples of the deals which failed to create value like Tata Corus, eBay Skype, etc. An extensive reasoning on the failures which may arise right from initiation phase like poor communication, valuation issues, payment issues, due diligence, etc. are explained. Also the post-integration phase issues like integration failure, cultural clashes, etc. have been discussed in brief. Toward the end of the chapter, success mantra for M&A is explained in brief. If the combining entities follow these guidelines, the probability of creation of a value-enhancing combination goes up.