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    M&A Failures

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    Compare and contrast M&A failures.

    Discuss reasons why an M&A fails, such as technical and legal insolvency, and bankruptcy.

    Consider what happens to the stakeholders, company image, price per share, market share, company assets, industry position, goodwill, and service capability. Once the failure of an M&A occurs, what happens to assets of both companies?

    Compare and contrast two to three forms of corporate restructuring. Would you recommend any of the following?

    Spin-offs
    Divestitures
    Liquidation
    Carve- out

    Defend your position.

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    Solution Preview

    Compare and contrast M&A failures.

    Discuss reasons why an M&A fails, such as technical and legal insolvency, and bankruptcy.
    There are several reasons why Mergers and Acquisitions fail is that there is a clash of cultures of the two organizations. This leads to conflicts and failure to make the merger successful. Further, there may be a mismatch in the technological standards of the two companies. One company uses the traditional assembly line whereas the other uses robots. Further, there may be differences in the level of legal compliance, especially in case of transnational mergers. Another important reason for M&A failure is that a large sum of money is borrowed to acquire the company. The debt is so large that the merged company has to file for bankruptcy.

    The differences in the objective of the two companies are also an important reason for M&A failure.

    Consider what happens to the stakeholders, company image, price per share, market share, company assets, industry position, goodwill, and service capability. Once the failure of an M&A occurs, what happens to assets of both companies?
    M&A failure occurs-the shareholders lose value and ...

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