Mergers and Acquisitions

Mergers & Acquisitions

Angela Clarke

Averett University

Strategic Management

BSA444

Dr. Philip Sturm

August 16, 2015

Mergers & Acquisitions

The following paper will cover information regarding mergers and acquisitions. I will cover the reasons why some mergers fail and others succeed. Examples of companies will be provided that have succeeded and failed with mergers and acquisitions. Mergers and acquisitions will be abbreviated with M & A’s in this paper.

Mergers and acquisitions are very expensive and usually viewed to be negative. Most people do not feel there are positive outcomes from them. Many American people fear the layoffs that come with M & A’s, especially those who work for the companies involved. M & A’s are not always bad and there are many reasons for having them. M & A’s is a tactic to execute strategy used to save or help companies, and if they are done correctly they can be very successful once the process is complete.

First we need to understand why the many reasons these M & A’s occur. The main reason is due to the fact that the purchasing company is seeking ways to improve financial performance. Mergers can help increase revenue or stock, while reducing its competition. A company that is merged can reduce the cost by removing and merging departments that are no longer needed. M & A’s can be very successful, while others fail and end in a financial loss.

More than half of all M & A’s fail but not all of them do. There are several reasons why M & A’s fail. The biggest reason is due to poor planning and trying to cut costs too quickly. In reality cutting costs and positions too quickly can cripple a company. Ultimately, the day to day business is neglected and suffers from the cuts. High turnover is bad because the company is losing people that have the key values and knowledge to help it succeed. Other reasons for failure are incorrect organizational structures, wrong team...