The short answer is: not always. Numerous empirical studies suggest that the average success rate of completed M&A transactions hovers around 50%. While the Americas tend to perform above average, regions like Europe and APAC often sit closer to the median. Southeast Asia lags slightly behind.
M&A is a delicate and complex undertaking. Misreading the “chemistry” between companies can result in failure. A relevant case is the much-publicized Sony–Zee merger that collapsed after two years of negotiation—leading to a 50% drop in Zee’s shareholder value.
But what defines M&A success? Is it the incremental gains in revenue, EBITDA, EPS, market capitalization, or brand value after the merger? Over what timeline? Things become even more complex when companies go through consecutive acquisitions—raising questions about how to isolate the success or failure of each deal.
Common Reasons for M&A Failure:
Falling in love with the target too early and misjudging synergies.
Overestimating perceived synergy—leading to overvaluation.
Incomplete or superficial due diligence—technically, financially, or culturally.
Lack of a supportive, inclusive post-merger integration mindset from the acquirer.
A dominance-driven integration approach that sidelines the acquired team.
Biased or flawed people integration processes.
Managerial hubris.