In a recent “Helping Your Business Grow” series sponsored by a leading Mergers and acquisitions advisory firm, the audience chimed in with questions on a side comment made by one of the panelists that research shows 75 percent of deals fail.

Not surprisingly, with such low odds, folks wondered about the factors that can bring down a deal.

If one simply types in Shinsei-Aozora Bank Merger on Google, there are some interesting disaster factors highlighted regarding this merger situation over time.

Headlines on the merger regularly included terms such as:
* Snagged.
* May collapse.
* Appears to be faltering.

Most recently, “proposal scrapped” was the concluding message.

I began following this story some months ago with a report in The Wall Street Journal, on Monday, February 22, 2010.

Understandably, since this publication has a financial reporting orientation, the majority of this article highlighted the financial predicament of these two mid-size Japanese banks.

Evidently, this combination was a “forced” merger of some type that evolved out of a financial crisis and a sense of fiscal urgency.

As the article continues, there is mention of “tensions brewing for months” concerning capital requirements, liquidity issues, and, get this, a disaster-in-the making prediction: “The regulators are mindful of the pitfalls of a mismanaged merger and are keen to avoid one in which the banks only partially merge and fight internally.”

By way of example, the article references one of Japan’s top banks that is the “result of a merger of three banks in 2002 and each still jealously safeguards its culture and influence within the group.”

Culture clashes, not having a shared vision and failing to agree on multiple aspects of the business strategy brought down the house.

The panelist in the M&A advisory seminar noted that with the significant amount of dollars involved in bringing together a deal, two courses of action should be followed:

• First, the buyer should spend several days in the due diligence process simply observing. He noted that if you look carefully, you can see culture just by walking around.
• Second, bring in some good people whose experience and processes can bring together the people and the desired culture. It only makes sense to invest a comparatively small amount with professionals whose ability to create a shared vision among the management teams and employees significantly improves the success rate.

To help beat the odds, make sure you include an M&A Communications expert on your deal team. The components of culture and sharing visions are our specialty.