FREQUENTLY OCCURRING—BUT RARELY SUCCESSFUL—EVENTS
Mergers and acquisitions occur frequently, but typically fall short of achieving their financial or strategic objectives. Over 37,000 mergers and acquisitions were transacted worldwide in 2006 (Thomson Financial, 2007). The global value of M&A deals increased from US$462 billion in 1990 to over US$3.5 trillion in 2000 (Stahl & Mendenhall, 2005). A typical large corporation derives 30 percent of its revenue growth from acquisitions (Lovallo, Viguerie, Uhlander, & Horn, 2007).
While there is no consensus regarding how to measure the success or failure of corporate combinations, studies consistently report a dismal track record. Some researchers examine financial outcomes of M&A. Nearly two-thirds ...