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Source : http://knowledge.wharton.upenn.edu
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last activity : 07 06 2010 20:18:04 +0000
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When we go in for Mergers, the main aim of any company is Value Creation and if not value cration then atleast Value Capture. But the problem arisis when this allaince fails and it is seen that only 20-30% of the mergers succeed. The companies suffer huge losses. Losses not only in terms of financial loss but also the loss of image of the company etc.
There are various critical issues which should be kept in mind when going in for mergers.
Critical Issues:
- Over-payment
- Unanticipated events like technology obsolence.
- Adjusting with the Organisational Culture
- Loosing out good employees
- Loosing out customers esp. when they have apprehensions about the company with which you are merging.
These are a few critical issues, but more could be there and each organisation need to keep a track of all these in order to make sure that the step they are taking in other words merger is successful.
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3 comments on "Why Do So Many Mergers Fail?"
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Mathew Cherian, Research Associate/Analyst, Western Michigan University
| 05 27 2009 04:34:28 +0000
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Sourav Chatterjee, IT Engineer- CMC Limited-ATata Enterprise
| 07 22 2008 23:05:20 +0000
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Hardik Patel, Team Lead (Staffing and Recruitment), Rishabh Softwares Pvt. Ltd. / Rishi Infotech Pvt. Ltd
| 07 22 2008 14:57:13 +0000
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