Executive Summary:

Fusion is the consolidation of the two firms that creates new entity in the eyes of law.
There is pros and cons of mergers and acquisitions. According to research I found that
there is more adverse impact on the performance and profitability of the new
consolidated entity and I also analyzed the losses of billion dollars for CEO changes,
tarnished reputation, layoffs, and possibly, bankruptcy. The economy and the industries
also impact the success and failure of the mergers and acquisitions of the firms if the
industry is diversify then it will put a bad impact on the success of the mergers and
acquisitions.

During research I found that entities did not want to share failure reason of the mergers
and acquisitions and they feel hesitation to explaining the reason of such cons. This is
an exercise in research, the creating way of thinking about the success and failure in
M&A, drew from a detailed analysis at the research and cases. These were all failures
that could have been avoided or sharply removed. I hope to show why and how below
in details. The result is a volume that seeks to teach, rather than harangue, titillate the
reader, or humiliate the protagonists. Other analysts may beg to differ on the
interpretation of specific events in certain cases or of detailed points in the research
stories summarized here. Yet such differences should not cover up the higher point that
there are considerable similarities among merger failures and that such similarities lend
insight into the causes of failure and the implications for managers. Where the facts do
not fit with sympathetic explanations, I speak plainly; but generally, my bias is to view
the challenges facing executives as extremely difficult, arenas in which scholars and the
casual reader could easily have done worse.

Mergers fails due to complete set of factors when these factors combined with each
other then it becomes a perfect storm for mergers. I explained the failure reasoning of
the mergers and mergers failures took place due to breaking down in health,
bankruptcy, insolvency and so on. There are multiple factors that have adverse impact
on the mergers and acquisitions such as harnessing the perspective of the capital and
due to mergers company’s policy of measuring market value is to changed so because
of this the fair value of newly consolidated business become lesser than Carrying value.

Mergers failure happened due to inappropriate strategies made by the management

and Board of directors of the company, if there is enable strategies for merging entity
then it will prompt the adverse impact on the acquisition of the firms. There is also a
problem of the cultural and policies difference of the entities when one firms acquire
another then there is so difficult to change the culture of an entity to another. The
mergers and acquisition deal should enhance the goodwill of the acquirer and its deal
architects. Usually, the realization of these other goals and aims will do just that. But
one can imagine deals that depend on subterfuge, and a win-lose mentality in a world of
repeated play, the executive must consider how these qualities might affect mergers
and Acquisitions success in future deals. Measurable sources in this directions would
include alter in name, reputation, recognition, analyst sentiment, and press coverage.

There are many findings and the recent research present that in the ways of violate
norms such as duty, equity, honesty and lawful observance. Adverse judgments in
criminal and civil litigation would be a rough measure of M&A failure, though they
usually follow an extended lapse in ethics.

That mergers and acquisition is local also implies that I found constructive or destructive
patterns of managerial choice in the deals from hell or heaven that they produce. the
extreme outliers of deals, both good and bad, differ from each other and from the middle
in at least four general ways. The first regards strategy. In the best deals, buyers
acquire targets in industrially related areas. In the worst deals, targets are in areas that
are more distant. This may reflect the benefits of sticking to your knitting: Better
knowledge of a related industry may yield fewer surprises and more opportunities to
succeed.

A huge economic research suggests that investments through acquisition pay about as
well as other kinds of corporate investment. On an average, they cover the buyer’s cost
of capital. Competition in markets drive returns toward this cost. Neither is mergers and
acquisitions is necessarily a winner’s game. The returns to buyers show a wide
dispersion around the average. This suggest us that the one cannot be long term
success in mergers of firms. But the failure rate in mergers and acquisitions seems no
larger than in other business.