Question

Use a reputable and reliable source to support your response. Cite the source using APA formatting. News of mergers are plentiful: CBS and Viacom; CVS and Aetna; Keurig and Dr. Pepper; ThyssenKrupp and Tata Steel; etc. Some mergers are successful, while others fail. Chapter 2 begins the discussion of the accounting treatment for mergers and acquisitions. There are many steps that precede the culmination of a merger. What factors might prevent a merger from going forward? List at least three.

Answer 1

Merger: A new company is formed by the combination of any two companies combined. Old companies cease to exist and an entirely new company is formed.

Acquisition: Here a company purchases another company and the purchase company is collaborated with the acquiring company.

Reasons/Factors preventing a merger from going forward:

1. According to an Harvard Business Review, the failure of mergers and acquisitions are upto 80%. This can provide you the data of how much rate of non compliance of the both companies involving in mergers and acquisitions exists.

2. A merger which happens without the proper information of the complementary strengths of the other business with which the merger is going to take place.

3. In order to just eliminate competition some business merge with other companies but before that the growth rate and strategies are to be looked after in order to merge with that particular company.

4. The main criteria sometimes might be the non involvement of the business owners while they handle them to the others who doesn't make upto optimal level. Some things might be changed by them without prior experience which might eventually go wrong.

5. Proper safe plan should be established before committing to any of the merger or acquisition as sometimes after happening the phenomenon something might go wrong.