Abstract
The paper deals with the issue of 'Mergers and Acquisitions' in the western market, viewing the topic from the standpoint of their failures and successes. The subject is an extremely important one at present, as, on one side, there is a trend towards major international mergers and acquisitions, and, on the other side, multiple researches indicate that more than half of the deals are failures. Having done the research on the main factors of the failures of 'Mergers and Acquisitions', it was concluded that companies fail in closing deals, as they neglect the interests of their shareholders and are often driven by their own interests and motives. While shareholders are interested in financial flows that can generate a particular transaction, managers often overpay for the target, by mistake and sometimes even intentionally, and thus transfer wealth to the target company. Secondly, managers pay often in stock rather than in cash, communicating in such a way to shareholders indicates the company's insufficient liquidity. It has been determined the causes of failures, which affect company's shareholders. The content of the paper tells about how shareholders have an uncanny knack to react immediately to sudden changes in corporate structures, by pushing up or by pulling down the stock prices. Although, there exists numerous motives for Mergers and Acquisitions, companies must always set in advance the ultimate goal of value creation for their shareholders.
