February 5, 2016

The 2 + 2 = 3 effect for failed mergers [Video]

The 2 + 2 = 3 effect is the term commonly used to describe negative synergy in the business world.  Obviously, two plus two equals four, but when it only adds up to three, it means that the combined effort fell short of its expectations. This concept can also be applied to a failed merger.

 Some of the main reasons for a merger failure include a poor fit between companies, unpredictable market changes, problems with financial mismanagement and a buyout at an overinflated price.

All of these situations can be avoided by implementing managerial assessments and partnering with a skilled M&A professional before the merger takes place.

If your company is looking to pursue a merger or acquisition, seek out guidance from an expert M&A advisor. Contact us today to learn more.