One of the most effective ways to overcome entry barriers and expand markets is merger.

However, merging with another entity is always a risky venture no matter how extensively the negotiating process is conducted.

Along with the fast pace of globalization, a lot of business owners have the ambition of breaking into new markets worldwide.

In fact, a high rate of mergers has experienced failure due to the following main reasons.

No two companies can do the business in same way. The working and organization culture of every company is different.

A company may be different from the other on the basis of the way they project themselves in the market, how they treat customers, suppliers and employees, how much freedom is given to the employees and so on.

the merger or acquisition between two culturally different companies eventually leads to lower productivity if this issue is not addressed by the management right from the beginning.

When business owners set over-confident financial targets, they tend to tensely fight over limited resources.

Any negative economic outcome can lead to frustration and, more seriously, result in a steady decline in the share price.

Two businesses often have very different strategies and growth models.

This requires the board of directors to comprehensively understand the aim of merger then combine strategies suitably.

Weakness or over-optimism in management can push a new enterprise into a common trap.

In conclusion, seemingly good deals can go bad and merger is no exception.

The success of mergers depends on how realistic the deal makers are and how well they can integrate two companies while maintaining day-to-day operations.