The Dynamics of Merger and Acquisition Waves

The past two decades have witnessed the largest merger and acquisition (M&A) waves in history. Yet, the empirical evidence suggests that the perceived financial benefits of M&As often are not realized for corporate acquirers. We build a three-stage conceptual framework to illuminate the dynamics of this mergers and acquisitions wave activity and to help explain the frenzied persistence of this phenomenon despite poor performance results. From this framework, we show key considerations that are often missed in M&A assessments, particularly during a merger wave, and offer advice to ensure that managers make more enlightened M&A decisions.