When two companies decide to combine forces in a merger, the papers are shouting about it. Why are companies in industries ranging from telecommunications to financial services to retail looking to merge? And why do mergers and acquisitions sometimes fail to produce anticipated results?
What is meant by the term M&A, Mergers and Acquisitions? And is a successful M&A more of a fairy tale than reality?
To clarify why M&A can fail, I mainly stress what key points one should keep in mind in order to have better chances of success and why businesses should go green if they want to be successful!
Definitions
M&A is a generic term that can be broken down and defined more technically. We talk about a merger if an agreement between equals is made to combine their operations. However consolidation would mean that a new firm is created after a merger, and both acquiring firm and target firm shareholders receive shares in this firm.