Does M&A actually help companies?

Does M&A actually help companies? I know studies say 1/2 of M&A fails but that can be due to a variety of factors, but still I hear that culture clashes, layoffs, and difficulties transitioning the business often hurt the companies at the end.

Obviously distressed situations or things like Google buying out tiny tech companies create benefits but besides that do large mega-mergers (aka Pfizer-Wyeth) and the like actually help clients/society as a whole or just the bankers/consultants involved?

 

I've wondered that before as well, but I think there's definitely a few successful mega-mergers ... Arcelor-Mittal, Exxon-Mobil, AB-InBev, Oracle-Sun, JPMorgan-Chase Manhattan are just a few that come to mind (I think these were successful ... if I'm wrong, please feel free to correct).

 
Best Response
chiphifrat:
I've wondered that before as well, but I think there's definitely a few successful mega-mergers ... Arcelor-Mittal, Exxon-Mobil, AB-InBev, Oracle-Sun, JPMorgan-Chase Manhattan are just a few that come to mind (I think these were successful ... if I'm wrong, please feel free to correct).
ChiPhiFrat -- out of personal curiosity, what makes you think that these mergers were successful? I'm not casting judgment, just curious what your line of reasoning is as you seem to question yourself.
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I think it isn't, m&a is extremely disruptive. But it's a necessary function and a lot of time its the most efficient way to grow your company.

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TheBenevolent:
organic growth has its limits, m&a activity is necessary

Totally! But I still have a gut feeling that almost all the recent mega-mergers were not successful - to the companies, such as stock price, profit margin, ect, they were better off before the merger. However, to top executives, they are definitely better off after the takeover, as a study shows top executives' remuneration is positively correlated to the SIZE of the companies.

 

What about smaller M&A? I don't work in banking but aren't small acquisitions really helpful. For example, Google buying YouTube, AdWords, Doubleclick, whatever else it bought since I don't feel like doing the research now. These deals are small but probably add value since those companies had great technologies but couldn't get big without Google.

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