June 2, 2005 - 11:43 A.M.
Sun/StorageTek? Remember: Most mergers fail
- IT TOPICS:Hardware
The news of the proposed Sun/StorageTek merger reminds me of the fact that post-merger studies show that most mergers & acquisitions are failures -- including, and especially, in the IT field. (Remember AT&T buying NCR?)
Here's what we know:
* 58% of mergers failed to reach the value goals set by top management.
--- 1999 A.T.Kearney study of 115 transactions, cited in the book "After the Merger" (Pearson, 2000).
* 53% of mergers failed to deliver their expected results.
--- 2001 Booz Allen & Hamilton study of 78 deals
* 70% of mergers fail to achieve expected revenue synergies.
* 25% of merger execs overestimated the cost savings by at least 25%.
--- 2002 McKinsey & Co. study (discovered via Business 2.0's blog)
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