So in this video, we'll take a look at the successes and failures of mergers and acquisitions, and we'll check out whether companies manage to become partners for life, Or not. And I think what's the most interesting feature of mergers and acquisitions, and this has been shown in a lot of different studies across the years, is that how few mergers actually are successful. So looking at the failure rate across five studies, we see 75%, 60, 50, 50, and 30% of mergers fail in way or another, right? And we have different criteria of success. Do they achieve the stated objectives? Well, three quarters of them don't. Do they out outperform the stock market? And that I think is one of the most scary things, is that the least you would expect from a merger or an acquisition is actually to outperform the rest of the stock market. Well, 60% don't. One out of two mergers is not considered a success on the part of the managers that actually carried through the merger, and they don't achieve the shareholder performance that was expected of them. And many of them, 30% still do not create shareholder wealth. So this means that the failure rate of mergers and acquisitions is surprisingly high. And that of course also tells us that it's not an easy thing to do, right? Post-merger integration, finding the right target, doing due diligence, paying the right price. And finally, integrating the company to realize the synergies. These are all complex steps where you can go wrong at almost every turn along the way. What are possible reasons for failure? Why do they fail? Why do so many of them fail? Well, the first reason might be that they're not actually undertaken for the good of the company. They might be undertaken, or mergers and acquisitions may take place for private reasons on the part of the managers. Managers might pursue private interests. Managing a larger company gives them social status. They might get more power and in fact there's been a study, or there's been several studies that show that the income of chief executive officers actually increases in the size of the company. And that gives them a very own private incentive to manage large companies, with means to grow by means of either organic growth or of course by mergers and acquisitions. Well, markets and shareholders, stakeholders react after the announcement of a merger. And generally speaking, when a merger or an acquisition is announced the typical reaction of the stock market is that there's gonna be a price increase for a target. And of course what that means is that part of the profits that were initially expected from the merger are that way transferred to the target ex-shareholders, right? So we pay the shareholders of the target to sell their shares and we have to make it attractive for them, so we have to transfer some of the gains that we expect from the merger, some of the synergies. We have to transfer that to these shareholders. And of course, that's something that's not going to remain in the company. And finally, there might be post-merger difficulties. And given what we talked about when we talked about post-merger integration, I think that shouldn't be surprising. So mergers and acquisitions are risky strategies, right? They're risky undertakings. And they're often made, they're often done in periods of high uncertainty. And you can get the post-merger integration process wrong at literally every step along the way. They're difficult to assess in advance, right? It always sounds much easier, yeah, and then we're gonna integrate this company in one of these four different modes, but it's difficult to assess in advance. We cannot necessarily predict which of the managers is going to leave us. And that will, of course, leave us with key positions, key personnel, to be replaced. Well, and that's pretty much it. And I hope you enjoyed this module, and I'll see you again in just a few seconds in the wrap-up.