Mergers and acquisitions: A review of phases, motives, and success factors

Mergers and acquisitions (M&As) have become an increasingly broadbased phenomenon, and their numbers are growing dramatically in the United States, Europe, and elsewhere throughout the globe. Still, research shows us that less than 50% of M&As succeed. At the same time scholarly research on M&As abounds, presenting the opportunity to step back and review what we have learned and what we still do not know. Although the field of M&A research is far too broad and complex to be covered in one review essay, we attempt to begin at the beginning, covering some historical and background issues before surveying three topics fundamental to successful M&As. First, in order to lay the foundations for better understanding of M&A processes in general, we overview various approaches from those that include just two phases - premerger and postmerger - to those with seven phases - including aspects of due diligence and integration phases. The second topic refers to M&A motives such as entering a new market, gaining new scarce resources, achieving synergies, and so forth. The third issue is M&A success factors. Here we synthesize a large body of research that has pointed to many different managerial and organizational factors that are generally associated with M&A success, for example, relative size of M&A partners, managerial involvement, culture, and organizational structural issues. While no review of these topics can claim to be comprehensive, we do attempt to present a good variety of literature approaches representing not only elite scholarly journals but also some important practitioner-oriented books and articles.