Corporate Squabbles Kill M&A Deals

January 14, 2002 ( - Only half of the executives polled by the Conference Board say their recent involvement in an M&A deal succeeded.

Those transactions eventually got into trouble or fell apart entirely because of clashes between CEOs, according to new research from the group.

Leaders’ Short Attention Span 

Problems also arise when CEOs and other corporate leaders don’t continue their involvement beyond the original financial and legal negotiations, the study said.

For example, executives too infrequently wrestle with cultural issues that can cause stress and lead to drops in productivity, researchers found. Then, not only are there too few human resources professionals to handle the by-products of an M&A deal, they are often brought in too late to do much good.

Those clashes at the corporate level are most frequent when large, hierarchical companies with numerous rules and regulations acquire small entrepreneurs – particularly when the M&A centralizes formerly independent business units.

Signs of M&A Success

On the other hand, Conference Board researchers noted that acquisitions where successful when:

  • the acquiring companies has a strong corporate culture, with deeply and widely held values,
  • the acquiring corporations can retain the most important members of the management ranks to best leverage financial synergies,
  • the companies can quickly decide who is in charge. Having everyone say they’re in charge doesn’t work, and
  • the acquired workers are dealt with by people who are good at personal contact, negotiation, persuasion and empathy

The Conference Board survey includes the views of 164 top executives who have been recently involved in their firms’ M&A activities.