Why most mergers fail

Studies suggest that between half and most acquisitions fail to create value for the buyer. Three reasons repeat. First, the buyer pays too much, because competition in an auction pushes the price up. Second, the promised savings, called synergies, arrive late or not at all. Third, people leave. Cultures clash, and the talent that made the target valuable walks out the door. The seller usually wins. The buyer's shareholders often pay for the optimism.