Significantly, 45% of executives polled at technology, Internet and software companies expect their companies to merge within the next three years. It is a telling statistic that indicates that tech company executives are increasingly placing their businesses’ survival hopes on finding a suitor.
A good number of those who predicted their companies will merge also cited several reasons why mergers and acquisitions fail. Sixty-five percent of executives polled said that M&A deals fail because of poor integration strategies, while 62% attributed failures to key employees leaving. Fifty-five percent, meanwhile, said M&A deals fail because of culture clashes.
Notably, only 16% of those executives polled planned a cross-border merger. This reflects the difficulty of reconciling many issues, including cultural, labor and financial reporting. Witness DaimlerChrysler AG’s travails.
Forty-one percent of executives polled expect to pursue international strategic alliances rather than mergers. These provide some of the increased global marketing and manufacturing benefits of cross-border mergers, but are easier to exit than mergers.