Some industries are more suitable for combining companies than others. Technology, for example, tends to be a leading strategic driver of such deals, particularly given the rapid shift in digital technology in various business sectors in the past years. Since the process involves intense negotiations between companies, as well as government regulation, financial advisors are crucial in making such deals. Similarly, large legal firms dedicate themselves entirely to navigating the procedural difficulties of such transactions. The largest legal advisors oversee dozens of deals each quarter.
Achieving a successful M&A transaction depends on several factors, and there are many obstacles that companies must overcome. This underscores the risk involved. While the deal may seem logical for the reasons described above, measuring such things always contains error. For this reason, some transactions do not generate the expected returns. Firms carry out extensive research and data analysis, but there are no sure bets in the world of finance.