Why do Half of M&A Deals Fail? - Fleximize

Why Do Half of M&A Deals Fail?

Common mistakes in M&As that lead to failure.

By Marcia Smith

Most M&A deals look great on paper, but can fail because too little attention has been paid to the strategic and practical details. Common mistakes include:

– Insufficient management capacity for the new business

– Incompatible working practices and culture

– Underestimating the cost of integrating procedures, IT systems and staffing structures

– Failure to ensure enough working capital to operate the target company successfully – including the servicing of debts

– Overestimating the potential for improved efficiencies of the combined business

– High turnover of staff due to the stress and uncertainty of the M&A process, meaning a loss of valuable experience and skills