Frankfurt - MBA Masterclass with Prof Michael Gibbs

Some Companies are More Equal than Others: Why Mergers Often Fail

Michael J. Gibbs
Clinical Professor of Economics and Faculty Director, Executive MBA Program,
Chicago Booth

Mergers begin with great hopes for synergies, scale economies, access to new markets, and growth. Yet estimates are that more than half fail - do not live up to expectations - and many are eventually reversed. Why are so many mergers unsuccessful?

Professor Gibbs will discuss his research on mergers - focusing on post-merger integration. This step is often given short shrift during due diligence, but turns out to be the major challenge to successful merger. In their work, they found that few mergers actually result in mixing of workforces from the two companies, and that there is substantial turnover of the workforce as a result of the merger.

This research has useful implications for thinking about mergers in practice. For example, mergers of unequal partners are likely to fare better than those of equals. Merger in name, but not in organization, is likely to yield fewer synergies but may be the practical solution in many cases. When implementing a merger, the dominant firm should probably act quickly and aggressively to take control and implement change in the other firm.

Join us for a practical look at mergers ... beyond financial due diligence.

Agenda:

18:00 Registration
18:30 Executive MBA Information Presentation
19:00 Master Class with Professor Gibbs
20:00 Q&A with current students and alumni