Managing Merger Risk During the Post-Selection Phase

Abstract

Mergers and acquisitions are an important part of many companies’ strategic plans, yet they often fail to meet expectations. This may be due in part to a lack of understanding of the risks and the failure to apply a practical framework for managing them. Risk management techniques or frameworks have been developed for use in projects involving mergers and acquisitions (M&A), and many other company projects. Here we identify risks present and the risk resolutions available at this stage of the M&A process via a review of the literature and interviews with experienced managers of mergers and acquisitions. We develop a practical framework for managing post-selection phase risks in M&A. We analyzed published case studies to evaluate the framework. This research contributes to the literature by identifying and classifying the risks and risk resolutions in the post-selection phase of the M&A process and providing a practical framework for managing risks.

Keywords: Mergers, acquisition, risk management, risk management framework, merger risk, improving merger performance