Which of the following factors is most likely a reason for the failure of a merger or acquisition?

A) The size of the workforce of the acquiring firm was bigger than that of the acquired firm.
B) The new business was too far from the areas of expertise of the acquiring firm.
C) The accounting systems of both firms were different.
D) The parent firm incurred high levels of research-and-development expenditure.

Question

Zybrea Knight · Accepted Answer

Final Answer : B, Explanation :  The success of a merger or acquisition often hinges on the acquiring firm's ability to integrate and manage the new business effectively. When the new business is too far from the areas of expertise of the acquiring firm, it can lead to challenges in understanding the market, managing operations, and leveraging synergies, thereby increasing the likelihood of failure.

Definitions

Learning Objectives

Learning Objectives

Related questions