Volume 17, Issue 1, July 2016, Pages 150–158
Godfred Yaw Koi-Akrofi1
1 Senior Lecturer, Department of Information Technology, University of Professional Studies, Accra (UPSA), Accra, Ghana
Original language: English
Copyright © 2016 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Mergers and acquisitions represent the ultimate in change for a business. Despite this, it is common knowledge that mergers and acquisitions do fail and they do not necessarily create shareholder value. The main aim of this piece of research work was to contribute to the general body of knowledge in the area of failure rates, and the perspectives on why mergers and acquisitions fail. The objective was to investigate from literature on the failure rates and perspectives on why M & As fail, present the various discussions and arguments on the subject matter, and then catalog them for researchers and students in this particular field. It was found that the integration stage of the whole merger and acquisition process was the most problematic area which contributes to merger and acquisition failure, and that the problem in the integration stage has to do with the human factor (the employees-coping with cultural differences, politics, lack of effective communication, etc). Another factor that occurred most after the human factor is poor strategies that are rolled out after the deal is sealed. Again, M & A failure rate is very high; averaging about 50%, regardless of the initial high hopes.
Author Keywords: merger, acquisition, failure, perspectives, shareholder, value.
Godfred Yaw Koi-Akrofi1
1 Senior Lecturer, Department of Information Technology, University of Professional Studies, Accra (UPSA), Accra, Ghana
Original language: English
Copyright © 2016 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
Mergers and acquisitions represent the ultimate in change for a business. Despite this, it is common knowledge that mergers and acquisitions do fail and they do not necessarily create shareholder value. The main aim of this piece of research work was to contribute to the general body of knowledge in the area of failure rates, and the perspectives on why mergers and acquisitions fail. The objective was to investigate from literature on the failure rates and perspectives on why M & As fail, present the various discussions and arguments on the subject matter, and then catalog them for researchers and students in this particular field. It was found that the integration stage of the whole merger and acquisition process was the most problematic area which contributes to merger and acquisition failure, and that the problem in the integration stage has to do with the human factor (the employees-coping with cultural differences, politics, lack of effective communication, etc). Another factor that occurred most after the human factor is poor strategies that are rolled out after the deal is sealed. Again, M & A failure rate is very high; averaging about 50%, regardless of the initial high hopes.
Author Keywords: merger, acquisition, failure, perspectives, shareholder, value.
How to Cite this Article
Godfred Yaw Koi-Akrofi, “MERGERS AND ACQUISITIONS FAILURE RATES AND PERSPECTIVES ON WHY THEY FAIL,” International Journal of Innovation and Applied Studies, vol. 17, no. 1, pp. 150–158, July 2016.
