„As is the case in marriage, business acquisitions often deliver surprises after the „I do’s.“ Why do these deals fall short? In a word, culture.
In 2018, nearly $3.9 trillion in M&As were announced. But typically 70%-90% of acquisitions are abysmal failures. Given that every year sees a new wave of M&A activity, why do we continue to see such a poor record of success?
Currency fluctuations and trade wars can derail some deals. Sometimes, proposed M&As collide with shifting markets or unforeseen technological complications. And in many cases, acquiring companies simply overpay for an asset and underestimate the costs of integration.
There is, however, a common thread running through most botched M&As: failed cultural integration. Deloitte has estimated that failed cultural integration is a primary cause in about 30 percent of failed M&As.
In the article below you will read about seven common mistakes related to cultural integration that bring down many promising M&As as well as best practices that can help bridge the cultural gap experienced during many M&As.