Mergers are more likely to be successful if:
A)They are expensive
B)They are friendly
C)They involve high premiums
D)The managers of the acquired firm leave to make way for new managers
E)There is less money spent on R&D during the first year after acquisition

Question

Quizplus · Accepted Answer

Research has shown that in friendly mergers, where both companies have a mutual desire to merge, there is usually better integration and cooperation between the companies, leading to a higher likelihood of success. Expensive mergers may put a strain on the finances of the acquiring company, and high premiums may lead to resentment from shareholders of the acquiring company. The departure of the managers of the acquired company may cause disruption and loss of valuable knowledge and skills. Less money spent on R&D may lead to a decrease in innovation and competitiveness in the long run.

Mergers Are More Likely to Be Successful If