While some M&A deals turn out to be great successes, it’s no surprise that a lot of mergers and acquisitions fail. The obvious factors explaining the failures include culture clashes or founders leaving—taking the DNA with them in the process.
But M&A is more art than science, and the reasons why so many deals fail to deliver on their 1+1=3 promise are complex. Here are some:
The right hand isn’t talking to the left hand, part 1: buy vs build
Many buyers initially seek to “build instead of buy”, so a company may buy an asset that directly competes with an existing business unit, be it established or emerging. This not only leads to culture clashes and turf battles, but it creates a lot of operational confusion. In other words, even if everyone has the best of intentions, you either need to put an objective, arbitrary person to chaperone this initial rough process or put the heads of the respective units in a room until they determine a course of action.
To read the full, original article click on this link: Why So Many M&A Deals Fail | TechCrunch
