The New M&A Playbook

by Clayton M. Christensen, Richard Alton, Curtis Rising, and Andrew Waldeck

WHEN A CEO WANTS TO BOOST CORPORATE performance or jump-start long-term growth, the thought of acquiring another company can be extraordinarily seductive. Indeed, companies spend more than $2 trillion on acquisitions every year. Yet study after study puts the failure rate of mergers and acquisitions somewhere between 70% and 90%. A lot of researchers have tried to explain those abysmal statistics, usually by analyzing the attributes of deals that worked and those that didn’t. What’s lacking, we believe, is a robust theory that identifies the causes of those successes and failures.

Here we propose such a theory. In a nutshell, it is this: So many acquisitions ...

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