[Haytham Wehbe]

What are the major causes for M&A failure.

[Damien]

Based on my experience some of the key reasons are as follow:
1. Cultural issues not captured during due diligence, underestimated and/or not properly addressed before/for Day 1
2. Limited due diligence scope often linked to the fear to spend too much money while the deal could not be signed due to state preemptive right when states own a minority stake
3. Discontinuity in resources between the due diligence team and the post-merger integration team
4. Starting the integration project post-signing only and focusing mainly on the day 1 for finance
5. IT synergies notably system decommissioning having an over-evaluated value and the decommissioning is delayed

[Roberto Ochoa]

1. Overpaying – the buyer should always have a valuation that justify the price they’re paying.
2. Overcommitting – about achieving revenue and cost synergies.
3. Poor execution – make sure to involve the right people (i.e. the ones with technical skills to buy the business and the ones with the operational skills to run the business).

[Astrid]

I see the following reasons that could explain M&A failures:
– Unrealtistic business case & synergies targets
– Lack of communication between the workstreams
– Interdependencies between the workstreams not well identified or anticipated
– Intergation leaders not empowered to be able to make quick decisions
– Resources allocated to the integration have no specific time dedicated to integration but need to do it on top of their daily business: issue of bandwitdth & prioritization

[Ben H]

– Lack of cultural integration
– Paying too much for an acquisition
– Lack of synergies
– M&A motivated by financial purposes without considering other aspects

[Author]

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