chapter 5

Keeping the Best in a takeover: A case study

There is no security on this earth, there is only opportunity.

General Douglas MacArthur

Mergers and acquisitions present a situation where the issues of identifying, retaining and developing the best are placed in high relief. The failure rate of mergers, where failure is defined as inability to increase shareholder value, is above 80 percent. Research studies indicate that about 65 percent of M&As fail due to ‘people issues’, which are generally lumped together under the heading of ‘culture clashes’. Culture is clearly an issue, but to write off all the human issues of mergers and acquisitions under the assumption that a significant majority of people in the organizations involved ...

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