Success and Failure of Mergers and Acquisition

Abstract

Abstract The phenomenon of mergers and acquisitions has developed to be a highly popular form of corporate development to create growth and diversity. The increase in M&A activity has given rise to the growth of academic research on this topic, and the rapidly evolving nature of M&A also requires constant updating in the research field. The study of mergers and acquisitions represents a broad interdisciplinary field of research. Over the past decades, many firms have been implementing strategic mergers and acquisitions to achieve inorganic growth or to boost the corporate overall performance. Mergers and acquisitions are ever present in the corporate world, and they have become an increasingly important part of corporate strategies. However, not all attempts to undertake a merger between two companies are successful: the reported failure rate in mergers and acquisitions is actually high. So what are the reasons and factors as of why do some mergers succeed whereas others fail? The literature in this research will points to several possible answers to this question. In this thesis the analysis will be base on two merger cases, which involve four companies. Both the merger cases analysed in this thesis include companies with a high level of innovation in products and processes, along with high investments in research and development (R&D). This study intends to open a new research direction in this field by drawing insights from the literature on technological and organizational innovation for the study of the determinants of mergers’ success and failures. The empirical analysis will be focus on the comparison of two different mergers and acquisitions, one that was successful and one unsuccessful case.