Success and Failure of Merger and Acquisition

Running head: MERGER AND ACQUISITION
Merger and Acquisition
Name of the student
Name of the University
Author note

1MERGER AND ACQUISITION
Success of merger or acquisition
The success of merger takes place due to the fact that it helps a larger firm in reducing
the average costs. The lower average cost helps in providing low prices to the customers.
Merger helps a firm in increasing in size and it helps an organization in dealing with threat
from the multinationals (Belcourt & McBey, 2016). Merger helps a firm in surviving in the
global market. Mergers can help a firm in gaining profit that helps it in financing the risky
investments.
Causes of failure of merger
There are various factors that lead to the failure of the merger and the acquisition.
Poor communication is another factor that leads to the failure of the merger. Communication
can help in facilitating the execution of the business strategy and improper communication
can cause a merger to fail. The competitors can take the advantage of the uncertainty
prevailing in the environment which can cause an acquisition to fail (Greve & Man Zhang,
2017). The mergers fail because of the element of poor governance. There can be lack of the
clarity regarding who would decide what that can cause a merger to fail.
Factors to be considered by US company while merging
There are certain issues that the US companies should take note of in the event of
merging with an international company. The companies based in US should understand
cultural dynamics of that of acquired organization that can help the company in the case of an
acquisition. The US companies before making the acquisition should be able to make
business case that can help the company in understanding the reasons for carrying out the
deal.
Culture and merger