Why do the majority of merger and acquisitions fail?

by Iturralde, Aitor; Nacha, Manuel

Abstract (Summary)
In the last decade, there has been a great increase in the number of mergers andacquisitions all over the world. This enhancement of the number of transactions isincluded in the most of the previous studies but moreover, many of these studies showthat the majority of the mergers and acquisitions fail in the objective of creating valuefor the shareholders. This failure ratio is the reason which leads us to the next researchquestion: why do the majority of mergers and acquisitions fail?In this study, we introduce the basic concepts that must be known before answering theresearch question and the reasons that other authors have pointed out for explaining thisfailure ratio.After this theoretical background, we conduct a comparative research of four cases,some of them with a successful result and some others with a failure one, in order todetermine the key factors that explain the reasons why some of the mergers andacquisitions fail or success.The study shows that there is a wide range of features when determining this failure orsuccess. The analysis of the four case studies indicates that most of the reasons for thisfailure or success were previously considered by other authors, but some new reasonswill be presented.
Bibliographical Information:


School:Umeå universitet

School Location:Sweden

Source Type:Master's Thesis

Keywords:merger and acquisitions failure


Date of Publication:08/06/2007

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