Home  Journals  Financial Analytics: Science and Experience  2(332) - 2017 February

Mergers and acquisitions: Causes and ways to prevent failure

Vol. 10, Iss. 2, FEBRUARY 2017

Article PDF Version

Received: 1 December 2016

Received in revised form: 15 December 2016

Accepted: 16 December 2016

Available online: 28 February 2017

Subject Heading: FINANCIAL INSTRUMENTS

JEL Classification: G32, G34

Pages: 215-225

https://doi.org/10.24891/fa.10.2.215

Importance When parties to M&A set up strategic goals, top managers pursue synergistic effects. It requires stakeholders to concentrate significant resources, expertise in decision-making, and prudence. Successful deals depend on an array of factors, which, if neglected, may seriously undermine any deal.
Objectives The research reveals key factors that undermine M&A deals at their various stages. I also determine what measures and activities should be undertaken to prevent failures and mitigate possible adverse consequences.
Methods The research systematizes and summarizes scientific material on the matter, relies upon logic and structural analysis of the dealing process and causes of failures.
Results I studied key factors, which threatened M&A deals at various stages, and provided the rationale for activities to prevent any failures.
Conclusions and Relevance Although being very attractive for increasing the business value even during financial challenges, M&A imply a lot of risks. To derive the desired result from the deals, parties should forecast possible exogenous and endogenous aspects that may impede their success at any stage. Therefore, it is reasonable to outline a road map for preventing or mitigating adverse consequences of failure to close the deal.

Keywords: restructuring, synergistic effect, success, strategic goal, M&A

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