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Q: Business Mergers Success Rate ( Answered,   0 Comments )
Subject: Business Mergers Success Rate
Category: Business and Money
Asked by: egladesboy-ga
List Price: $20.00
Posted: 13 Jun 2005 12:07 PDT
Expires: 13 Jul 2005 12:07 PDT
Question ID: 532857
What percentage of business mergers attain the financial or operational
goals they set out to attain (before the merger)?

Put another way, what percentage of business mergers are successful?
Subject: Re: Business Mergers Success Rate
Answered By: websearcher-ga on 13 Jun 2005 12:29 PDT
Hi egladesboy:

Thanks for the interesting question. 

I found a wealth of statistics out there about the success/failure
rate of mergers in the business world....

The bad news: Everyone uses a slightly different criteria for
"success" so no two sets of numbers match exactly.

The good news: While the numbers don't match exactly, they all come in
around the same range - that about one-third of mergers succeed while
two-thirds fail.

Here are some various sources that I found:

A tentative model of management accounting and control in the
integration of mergers and acquisitions
Quote: "However, approximately two out of every three M&As fail to
achieve the intended goals which were the stated reasons for the
business deal."

Strategic Management Research Center
Quote: "At the same time, the success rate of M&As has been poor ?
some estimates put failure rates as high as 60?70%."

Mergers a rite of passage in life of U.S. companies
Quote: "Some studies show that 50 to 70 percent of mergers fail, in
that they don't live up to their financial promise."

Why Business Marriages Fail
Quote: "The stats on M&A failure, in fact, might be gloomier than the American
divorce rate. Depending on whether success is defined by shareholder value,
customer satisfaction, or some other measure, most research places the
merger failure rate somewhere between 50% and 80%."

Given what I've found and the subjectivity of setting precise
measurement criteria, that a one-third success rate is going to be the
best metric for you to use.

Search Strategy (on Google):
* successful "percentage of" "business mergers" 
* "success rate" "business mergers" 
* "failure rate" "business mergers" 

I hope this helps. Please let me know if you need further clarification. 

There are no comments at this time.

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