Corporate mergers & acquisition have become popular across the Globe since long time, but is also the fact according to American Management Association that half of the mergers are not successful.
“London Business School” states that important factor for merger is a thorough audit of the target company before the takeover. This study basically deals with reasons responsible for failure of Mergers across the world. World have witnessed many high profile but failed mergers like AOL-Time Warner, Daimler-Chrysler, Alcatel-Lucent etc. This study focuses on various reasons responsible for failure of Mergers like: All mergers are not able to create wealth for
shareholders of the prey company, size of companies getting merged creates a lot of problem, diversification in business process brings gap in successful merger, mismatch in organizational culture, failure in examining the financial condition of company, over-estimation of synergistic
value etc.
The paper will aim at evaluating past examples of both successful & failed mergers and ultimately recommend the pitfalls that need to be avoided and the best practices that need to be adopted for any successful M&A exercise.