Reasons why mergers fail

Culture shock: Can you imagine IBM buying Google? The 'suit' culture of IBM will not at all jell with the casual approach that Google has, and a merger of this sort would fail miserably.

 2+2>4 attitude: This is a merger between #2 and #3 trying to take over #1 by merging. Typically, the customers of both #2 and #3 get confused and move to #1, leaving the merged entity in the lurch.

 No plan: Two companies try to sometimes merge and see if they can work out something in the long run. But if both of them didn't have a plan to begin with, then they may end up not having a plan even when they join.

 Poor integration: In IT, integration between products matters a lot, and a company that tries to grow by acquiring many companies tends to fail simply because it looks like a jigsaw puzzle that has not been put together properly.

 People trouble: Many companies tend to tell employees about mergers way too late in the day, and so confused people tend to leave and the ones who leave first are the smartest ones.

Lack of enthusiasm: Usually you hear of a brilliant start-up that was acquired by a respected brand and one year later, the founder of the start-up decides to 'pursue other interests' and from then on, the project runs out of steam. The failure here happens more due to lack of enthusiasm because the bright idea has become staid as time passes.

Who needs you? Sometimes, two companies decide to merge a little too late, when both their technologies have been outdated and surpassed by a superior force. A merger at such a time is not bound to produce the best of results. In fact, the top gun company may actually benefit while the two merged companies struggle to find their collective feet.

 Poor decisions: Who will do what at the top management level once the merger happens? Will the CFO of the bigger entity become the CFO of the combined entity even if the CFO of the smaller company is more capable? Put the wrong CFO on top and he will botch up, while the better CFO resigns in disgust and moves on to a competitor.

 Ego clashes: This is ultimately one of the reasons why a merger fails. People who have been given short shrift, or who perceive it as such (let's face it, most of us are legends in our own minds) are bound to try to cause friction, leading to a failed merger.