Problems of Merger and Acquisition in India

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It's a well known fact that a good number of mergers fail because of various factors including cultural differences and flawed intentions. Most companies when sign an agreement often get a create a bigger picture of their expectations as they believe in pure concept of higher capital gains when two are combining together. This belief is not always true as conditions in the market and economy often rules the operation and functioning of any company.

The history of merger and acquisitions have revealed that almost two thirds of the mergers taking place experience failure and feel disappointed on their own terms and pre defined parameters. At times even the motivation driving the mergers can prove to be intangible.

There are many factors contributing to the failure and elements that are problems of mergers and acquisition. There are many aspects that should be understood and analyzed before signing an agreement because even one small mistake in taking a decision can completely dump both the companies with an irreversible impact.

Some of the prominent issues with regards to failure of M&A are as follows:
A flawed intention in terms of unethical motivation or high expectations can eventually lead to failure of the merger. If any company desires high capital gain along with glory and fame irrespective of the corporate strategy defined to fulfill the requirements of the company, the merger fails.

Any kind of agreement based completely on the optimistic stock market condition can also lead to failure as stock market is an uncertain entity. In such cases more risks are involved with the prevailing merger.

Cultural difference is also a big problem in case of a merger. When two companies from different corporate cultures come together it becomes a really challenging task to integrate the cultures of both the companies. It is certainly difficult to maintain the difference and move ahead for success without any kind of integration.


Contact Mr Ajay Gehi

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Types of Mergers and Acquisitions
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Merger and Acquisition in India
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Investment Banking
Due Diligence
Problems of Merger and
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Process of Merger and Acquisition