This book provides the reader with a powerful blueprint on how merger failures can be avoided. It draws the readers' attention towards real world examples and sources of the failures, followed by lessons that executives can learn before entering into similar deals and avoiding similar mistakes.
The book "Mergers: What Can Go Wrong and How to Prevent It" is an insightful guide on Mergers and Acquisitions (M&As), focusing on the most often debated key issues in M&As-why do some deals fail miserably and others prosper. The companies choose M&A for expansion and revenue growth, but there is an even greater chance of its failure. It delves into issues like what a potential buyer should look for in a target company while entering into a deal, and the various pitfalls to avoid during the process. The book provides real world cases of some major mergers to drive home the point.
M&A activity, which started during 1903, has so far seen five different merger waves spanning five time zones. During this era, companies had many bad deals as by-products of high volumes of M&As, says the author. In this merger mania, the dealmakers blamed the investment bankers and vice versa. However, the ultimate losers are the shareholders who pay a substantial amount of money for the boards' ignorance. With these kinds of merging activities, people might end up with questions such as-How to avoid such failures? What steps can help the companies before entering into any deal? Who are making mistakes; the investment bankers or the dealmakers?
The author, Patrick A Gaughan, attempts to provide the merger lessons, reasons for merger failures, and measures to prevent them. There could be many reasons for the firms to merge or acquire. He avers that it is important for the firms to justify their merger or acquisition, as there is a possibility of entering into deals for the wrong reasons and which may not live-up to their expectations. He says that firms mostly merge or acquire either to achieve growth or to gain synergy.
|
