Question

Please describe two reasons why M&A can become a winner’s curse.

Answer 1

Mergers and acquisitions are something to be dealt with very carefully. They could prove to be really great for your company, whereas at the same time they could completely ruin what you have at the moment and be like a curse for your firm.

Reason for this could be that when mergers take place, its not only the firm thats being merged but also staff who are merging as one along with the firm. Difference in opinion could arise between existing staff of the firm and the new one's who just made their way in and this could lead to clashes and could completely ruin the whole goong of the firm.

Sometimes acquisitions are made without proper understanding of the company being acquired or at times even fake information would lead to some acquisitions. But only after the acquisition would they realise that its i big mistake they did and hence it could lead to many problems for the firm. From a profit making company, they could go on and make losses.

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