M&A Breakups: The Trends and Reasons Behind Corporate Divorces

Though mergers and acquisitions bring companies together in expensive and thoroughly documented transactions, many end eventually in ruptured unions. In a recent study of 1,365 mergers and acquisitions by S&P 500 firms between 1983 and 2010, we found that 46 percent of corporate unions resulted in divorces, with up to 77 percent of the breakups representing failures of the parties to build lasting relationships. But what accounts for the unsuccessful bonds?

We answer this question and discover statistical trends by constructing a new and comprehensive data set of corporate divorces. To identify solid evidence about traceable mergers and acquisitions, we … Read more