
Growth Strategies of Blue Companies 101
So mergers and acquisitions do create total value. And they are partic-
ularly valuable in cases in which the rm can use them to ll gaps in
its product portfolio. But acquirers lose on average. Target sharehold-
ers gain. This suggests that at least part of the problem is the division
of gains from the merger between the acquirer and the target. In fact,
Figure 8.4 indicates the main reasons why mergers don’t work well for
acquirers on average.
We have already discussed the issue of overestimating synergies and
paying too much for a target as a consequence. Quite often, the over-
payment comes