Why Companies Do Not Pursue Attractive Mergers and Acquisitions ...

A multicase study method is used to develop conclusions. The study is based on 37 cases, all involving reversed decisions made by 27 companies. The companies were headquartered in or had operating responsibilities for the United States, Australia, and Europe. Pattern matching (Yin, 1994) is the predominant mode of logic and analytical technique used.

The study contributes to strategic management M&A theory by providing an alternative view of performance improvement complementing one first advanced by Ansoff et al. (1971) that deals with postacquisition failure. It also makes a secondary contribution to strategic decision-making (SDM) theory by extending it more specifically into the M&A domain. Finally, it contributes to practice by providing insights into factors that might be managed so that fewer attractive opportunities are forgone.

1.2. Rationale for Research: To Improve Acquisition Performance

1.2.1. Introduction

Much of the literature dealing with merger and acquisition (M&A) performance advances suggestions and normative prescriptions for avoiding failure. This study suggests the complementary view that performance can also be improved by not missing opportunities.

1.2.2. The Need for Better M&A Performance

M&As are an important and growing phenomenon. Yet a large proportion of acquisitions fail. While there are numerous approaches to measuring success and failure rates—yielding quite different results—there appears to be a consensus that between one third and half of all M&As fail.