Looking inside Mergers and Acquisitions

Introduction

Mergers and acquisitions (M&A) are now emerging as a major influence on contemporary business expansion. They provide a popular means of achieving rapid growth and market entry. It has been reported that there are over 30,000 M&A transactions annually in the new Millennium, which could equivalent to the completion of one deal every 17 minutes. Companies spent $3,500 billion US dollars altogether in 2000 in all M&A cases, a huge increase despite nearly $500bn in 1991 and $1,500bn in 1997. These factors could figure out that, from both terms of global cases and investment, merger and acquisition are widely welcomed by chief executives globally.

In spite of the popularity of merger and acquisition, a recent report of Financial Times sounded the alarm and gave a warning: between 65 and 75% of all mergers and acquisitions fail. Some other resources reported about one in two merger and acquisition cases fail. Anyway, it seems that M&A activities should be accompanied by a ...