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Why do an M&A deal? Behavioural finance explanations on why managers pursue large acquisitions or mergers

Prof. Scott Moeller and Rasa Balsyte focus on the relatively new field of behavioural finance. They show how the different factors can also affect the M&A deal process.

Introduction The relevance of behavioural finance for M&A Critical academic view OverconfidenceConclusionsQuellen & Literaturverzeichnis

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Aside from some well-known research about the role of hubris – or management ego – as a driver for merger and acquisition (M&A) deals, most of the literature and writing on the drivers of these deals consider that managers and boards are rational decisionmakers; other studies look at external drivers, such as economic and financial factors. The application of the relatively new field of behavioural finance has not yet been applied to M&A in detail. Through work conducted during 2010, we have concluded that there are significant psychological and behavioural drivers of deals that may be as critical as the more ‘rational’ factors.

A few examples to start: There’s extensive evidence that most of the time people (and probably especially successful managers) are overconfident. Studies have shown that what people think will happen 98 % of the time will actually only happen 60 % of the time. Similarly, people are optimistic and have an unrealistically rosy view of their own abilities and prospects. In this regard, another study showed that 90 % of drivers surveyed felt they were an above average driver!

This paper discusses these and other factors based on the principal author’s own work in the M&A field since the late 1970s and the coauthor’s recent Master’s dissertation, which included semi-structured interviews with senior practitioners in the M&A industry and an extensive literature review. The authors would like to thank those who participated in these interviews. This paper is organised as follows: Firstly, it will summarise some of the diverse modern behavioural fi nance theories which explain the behaviour of senior management but which have not yet been comprehensively applied specifically to the M&A fi eld. We then show from our interviews and experience how these factors can also affect the M&A deal process.

The relevance of behavioural finance for M&A

From a research perspective, the study of acquisitions has been influenced predominantly by the fi elds of economics, finance and strategy. Human behavioural factors have been largely ignored despite the fact that most researchers in M&A will agree that the success rate of these deals is dismal and typically found to be no greater than 30-40 % (Moeller & Brady, 2007). Although behavioural fi nance as a subject might be viewed as a relatively new approach to the analysis of fi nancial trends, its roots derive from as early as Adam Smith’s work in the 18th century. The modern application of behavioural phenomena related to the fi nance sector really started in the early 1970s, growing in popularity after each fi nancial crisis when other theories had failed to predict the markets adequately. Amos Tversky and Nobel laureate Daniel Kahneman (1974) conducted studies showing how loss aversion and other psychological factors can distort one‘s fi nancial judgement, and Hersh Shefrin (2002) demonstrated how psychological phenomena impact the fi nancial behaviour of individuals. Meanwhile, Robert Shiller (2005) drew attention to volatility in financial markets as well as market bubbles, arguing that the majority of investors make irrational decisions because of psychological factors such as herd behaviour and ‘epidemics’ which Shiller concludes to be ‘irrational exuberance’. However, there is little academic literature that analyses how behavioural finance influences managers’ behaviour specifically in the mergers and acquisitions arena. The most famous study applying behavioural finance to this field is Rolls’ seminal study in 1986 which analyses the concepts of managerial overconfidence (‘hubris’) and managerial optimism. That study has been used to explain why managers continue to pursue mergers or acquisitions even when the evidence is so overwhelming that most such deals fail. Other research in this area has revealed greater complexity and other behavioural factors that influence investors or managers in their decision-making. These can be organised into a number of categories and, in this article, we will use the Kahneman, Slovic and Tversky (1992) system which focuses on ‘biases’ (a predisposition toward error) and ‘heuristics’ (rules of thumb used to make a decision). The selection of certain factors within these broad categories is based on the principal author’s own experience in M&A, supplemented by the interviews conducted by the co-author.

Psychological biases and heuristics

There are a large number of psychological biases and heuristics that affect human behaviour, including decision-making and behavioural fi nance applies these to the business world and corporate decisions. In mid-2010, even Wikipedia listed almost 100 different such biases (although, admittedly, many of these overlap). We have selected six of these factors from the academic literature that appear to have the greatest relevance to mergers and acquisitions, based on initial discussions with a number of industry practitioners and then later tested in formal interviews.Summary of selected behavioural factor dimensions related to M&A deals

Excessive optimism and overconfidence are related biases and have been researched in the aforementioned works by Roll (1986), as well as Malmendier & Tate (2002) and Goel & Thakor (2002). The studies analyse management expectations as a driver of M&A activity in the context of hubris, stating that managers are overconfident, tend to overestimate potential synergies and underestimate the risks associated with deals.

Confirmation bias, according to Montier (2002) is the term used for people’s desire to find information that agrees with their existing beliefs. In other words, it is a cognitive bias whereby one tends to notice and look for information that confirms preconceptions. More over, such a bias describes the human be ha viour of even ignoring or discounting any thing that contradicts those initial beliefs. However, there isn’t much literature on whether and how confirmation bias influences senior managers’ decision-making processes in corporate finance, which was an issue that we sought to remedy through the interviews conducted.

Illusion of control is another important behavioural factor, named by psychologist Ellen Langer as early as 1975. From the behavioural perspective, the bias has been researched by Kahneman and Tversky (1982), Baker, Ruback et al (2004) and others. As outlined by Thompson (1999), it is the concept that “people overestimate the ability to control events, for instance to feel that they control outcomes that they demonstrably have no influence over”, and, as such, was certainly a factor that we felt would be evident in M&A deals and was confirmed in the interviews.

Anchoring as a concept related to finance has been described by Shefrin (2007) as the process whereby managers begin with an initial figure – often from outside the company – and then adjust it with new information and analysis inadequately: “Just as a dropped anchor keeps a boat from drifting too far, the initial numbers with which managers can begin can serve to anchor their judgements.”

Availability of information is a cognitive heuristic in which a decision-maker relies too heavily on knowledge that is readily available, rather than examining information that is more difficult to obtain. Tversky and Kahneman (1973) analysed this heuristic in the light of cognitive psychology relating to the judgement of frequency and probability. The only study that we could find which looks closely at information availability heuristics in relation to managerial decisions in M&A was presented by Shefrin (2007).

In researching the affect heuristic, Slovic et al (2002) state that affective human behaviour responses may occur rapidly and automatically, noting for example how quickly people sense feelings associated with stimulus words such as ‘treasure’ or ‘hate’. Thus, they argue that reliance on these feelings can be characterised as the ‘affect heuristic’. Based on a case study of senior managers’ behaviour during the decision-making process in M&A, Shefrin (2007) defi nes affect heuristics as “basing decisions primarily on intuition, instinct, and gut feeling”. Although all of these factors can be seen in all phases of an M&A deal, we show below where these factors principally apply across the deal process of design (including, as we later discuss, deal sourcing, selection and the final ‘go’-‘no go’ decision), pricing and integration.Behavioural factors

Critical academic view

Although behavioural finance has been gaining support in recent years, it is not without its critics. The efficient market hypothesis is considered one of the foundations of modern financial theory. Some supporters of the efficient market hypothesis, for example, are vocal critics of behavioural finance. However, the efficient market theory does not account for irrationality because it assumes that the  market price of a security reflects the impact of all relevant information as it is released. Amongst the most notable critics of behavioural finance is Eugene Fama, one of the founders of market efficiency theory. Fama suggests that even though there are some anomalies that cannot be explained by modern financial theory, market efficiency should not be totally abandoned in favour of behavioural finance. In fact, he notes that many of the anomalies found in conventional theories could be considered shorter-term chance events which are eventually corrected over time. In his 1997 paper, entitled Market Efficiency, Long-Term Returns and Behavioural Finance, Fama argues that many of the findings in behavioural finance appear to contradict each other and that, all in all, behavioural finance itself appears to be a collection of anomalies that can be explained by market efficiency.

Comments from deal-makers

To test our sense of the market and the expected broad influence of these six behavioural factors, we conducted a number of semistructured interviews. Due to the complexity of the subject under analysis and the senior management decision-making process, semistructured interviews were used to allow us to ask follow-up questions and to solicit realworld case study examples. The interviewees were all senior managers with extensive decision-making experience in M&A, and the interviews were conducted under the direction of the M&A Research Centre at Cass Business School in London. Interviewees were asked to discuss deals and their decision-making process. The interviewers kept in mind the above biases and heuristics in order to identify their effect upon that process, but these factors were not explicitly described to the interviewees. The different factors which were approached in those interviews were as follows:

  • Overconfidence/excessive optimism and affectheuristics: In order to test the presence of emotional reasoning behind the senior managements’ decisions, respondents were asked to describe how CEOs acted in the M&A deals observed or experienced.
  • Confirmation bias: Interviewees were requested to elaborate on information challenges during the deal process and to agree or disagree with the statement ‘people attach too much importance to information that supports their views relative to information that runs counter to their views’ and to provide examples from their direct experience.People attach too much importance to information that supports their views.
  • Illusion of control: Due to the sensitivity of this factor, only certain respondents (the advisors) were asked direct questions about whether they think senior managers exhibit ‘illusionary control’. Key decision-makers were asked to comment on how much control they have over processes, decision-making, deal selection, etc.
  • Anchoring: This was discussed within the context of the financial decisions and negotiations during the deal process, and specific questions were asked about how deal valuation was conducted and the pricing of deals agreed.
  • Information availability bias: Interviewees were asked about the means of gathering information, the hurdles during information gathering and the challenges that information related problems create.

The results of the interviews show some interesting commentary on these factors and how they apply to M&A deals. These comments are, by their nature, anecdotal and cannot be construed to apply to all deals. However, they provide an excellent ‘hands on’ summary of how these factors may impact upon the process and, ultimately, success of some, if not most, M&A deals.


Most M&A deals, when publicly announced with great fanfare, declare that they will achieve significant cost and possibly revenue synergies. McKinsey reported in 2005, however, that 70 % failed to achieve the stated revenue synergies and 40 % failed to achieve the expense synergies. This result is indicative of the overconfidence of senior managers about their ability to achieve savings and other deal goals as well. This was reflected in some of the interviewees’ comments:

“We always have to be very forward thinking I would say and usually even a little bit pushy. We need to be good sales people.”

“These people [doing the deals] would have this ultra high confidence and they would very strongly drive the deal forwards.”

“I must say we are quite successful and that gives us confidence - which is the most important thing.”

“[The deal-makers] are by definition super confident people. And it’s natural because as a CEO you are successful and by definition you are an achiever already.”

“They are indeed very confident and great believers in their businesses and they don’t like to give up, because it is predominantly their own ideas that they tend to unconditionally follow! It’s like a football coach: even if the team loses, the coach keeps believing in it.”

This overconfidence can sometimes be based on prior success and, when so linked, is then properly characterised as ‘hubris’.

Confirmation bias

The evidence from the interviews strongly supports the theoretical approach of confirmation bias and suggests that this bias is present as a behavioural factor which influences senior managers in M&A decisions. It is important to note that ‘confirmation bias’ is related and, at times, determined by the ‘information availability’ bias discussed further below. Information that is available during the initial deal stages forms the initial strong views of senior management which at later stages of the deal transform into confirmation bias, wherein contradictory information tends to be rejected.

“We have a saying about the actual motivations. And it’s called ‘deal horny’. So what happens is you get ready for a deal and everything you see confirms what you want to happen, as if leading towards the deal closure.”

“… even if the information is … not so useful or even contradictory, the CEO would try and push the deal if he really thinks it is a good deal and believes in the idea.”

“The team working with the CEO will want to give him information that supports his view. This is only natural. They will avoid telling him things he doesn’t want to hear.”

“It’s more difficult to prove to the company president that he’s wrong than to find some information – any information – to support what he wants to do.”Bad news is ignored – good news is given too much weight.

Based on the interviews, we observed that in most deals, preconceived views and expectations influence the final decision. Bad news is ignored, as is any other information that does not conform to the initial plan. Good news is given too much weight or used as evidence that the initial plans were correct.

In certain cases, senior managers were described as getting “emotionally attached”, which is related to this confirmation bias. It was noted that in most M&A transactions, managers’ overly optimistic belief or pessimistic lack of belief in a certain merger or acquisition would influence acceleration or termination of the transaction, regardless of the underlying features of the transaction.

“The CEO and management team would have invested a huge amount of time on a particular deal, so they naturally get emotionally attached to it and they subconsciously want it to be completed.”

Confirmation bias was also present in making a final decision due to time pressure: “…it would be extremely disappointing to walk away from the transaction at [a] late stage. So there is a natural effect of ignoring bad news.”

As time is just one of the many resources invested in a deal, other interviewees also noted that the more investment (time, money and other resources) in a deal, the more likely the company would try to identify reasons to continue with it even if there was new conflicting information which showed that it should be terminated. Similarly, those opposing a deal will rely too heavily on information which supports their position that the deal should be stopped.

Illusion of control

Evidence suggests that there is a strong presence of an illusion of control in the senior management decision-making process.

“When they get it wrong it is because they BELIEVE they can get it from A to B, but they lack knowledge, lack judgement to see that their strategy is flawed.”

“In any transaction, if the CEO will not want the change to happen, he has got enough control to make it not happen.”

The above statements confirm the strong presence of illusionary control as an innate CEO characteristic. However, other M&A research (Moeller & Brady, 2007) has shown that the success of a deal is ultimately decided after deal closing when the whole organisation must pull together to operate as a combined new firm – and instructions from senior management are not sufficient to make this happen.

Thus it is that during the interviews, respondents such as investment bankers and accountants elaborated on the control element and decision-making processes in large deal-making institutions. The interviewees emphasised the CEO’s role in the decisionmaking process in large companies, emphasising the need in many organisations for collaborative decisions and team work:

“… with mid- to large cap companies, on sizeable acquisitions, CEOs tend to rely a lot on their teams.”

“Sometimes it is top down, but sometimes it is [a] bottom up approach. Thus you can’t actually say that it is all in [the] CEO’s hands only.”

“They [the CEOs] would get involved only in the final decision-making process and negotiations … in a kind of ‘ironing-out’ of certain issues.”

Interestingly enough, the distinction between the large corporates and the entrepreneurial, smaller-cap type of companies was evident throughout all interviews without exception. The aspects of how decision-making varies between large institutions/ public companies and smaller unlisted entities are discussed in more detail later.


Anchoring was evident most often during the valuation and pricing of a deal. This is, of course, a two-way process from both the target and the buyer. It also is very much a negotiation and subject to change if the markets moved significantly before the deal closed or if there was a material change in either company, either increasing or impairing the attractiveness of the target, or decreasing or increasing the ability of the purchaser to buy the target. However, this wasn’t often seen in practice:

“For most deals, the price paid varied very little after the two CEOs had early on agreed the price to pay. The rest of the deal team was then used to back into the agreed price to both companies, their shareholders and the analysts.”

“There could be some price movement if the deal had not yet been made public, but it is a definite ‘loss of face’ to change the price once the deal has been announced except in the most extreme of circumstances.”netIn public deals, the starting point is the target company’s stock price.

“If the price needs to change too much from the original high-level agreement, then the deal often stops rather than change the money side.”

What typically formed the anchor? In public deals, the starting point is the target company’s stock price.

“We know we have to make a bid over the company’s stock price. If we can’t get the synergies or other savings at that price, then we won’t bid.”

“The seller thinks that their highest stock price in the past couple years is a floor selling price. That’s usually an unreasonable expectation, especially in the past several years, but it has been difficult moving sellers from this view.”

“Even if we do detailed calculations, it always comes back to what the stock price is NOW.”

Information availability bias

The limits on information availability appear greater during the early stages of a deal when the process has just started and few managers or advisors are engaged in the process, often because of confidentiality concerns. Thus, for this factor, we have split the early ‘strategy’ phase into three different sub-phases of that part of the deal, as shown below:

Deal search

Personal contacts were often mentioned as being significant at the deal search stage when perhaps many possible acquisition candidates were still being considered. Some deal-makers research the market themselves searching for targets and, in these cases, personal networks and contacts were described as factors influencing the progression of information gathering. It is, of course, likely that such networks have similar information merely because they are operating in the same network, which can relate to the ‘confirmation bias’ factor that we will discuss later.Moeller Abb. 3

Other sellers proactively approach potential buyers. This should certainly be the easiest situation in which to obtain information about the target company as, in such a deal, the target is a willing seller and can also usually be trusted to give access to confi dential information, although may not volunteer negative information which might negatively influence the price or deal success.

The third way to obtain information is through professional intermediaries such as accountancy firms, specialised consultants, investment bankers and even business intelligence firms, including detective agencies. From our interviews, we found that many companies consider these expert advisors to be impartial and thus a preferred route, albeit at a cost.

“Most of the times we get information about deals from advisors like [accountancies] or investment bankers.”

“We have long-term relationships with some intermediaries – brokers who introduce us to a certain number of deals that we review.”

Third party advisors were also described in cross-border deals as playing the important role of ‘handholding’ companies whilst providing them with knowledge of a local region, regulations, business practices and other issues that otherwise might be foreign to the buyer. This was seen as critical when new markets were entered into where the acquiring company understood that it did not have internal knowledge of that market.

“…entering into the market ‘cold’ as it were, without having any connections or local presence, is very diffi cult. Thus it is much easier if you can get some local insights … just knowledge of how it works locally.”

Generally, during the deal sourcing stage, managers claimed that information is generally easily accessible and allows them to form an initial opinion about the deal. But perhaps this impression of the easy availability of data precludes the deeper search for information that might not be noticeable on the surface. Other studies (May, et al, 2002) found difficulties in the whole due diligence process in M&A deals, which highlights the importance of this behavioural factor on deal success.

Deal selection

Embedded within the theory about information availability is the concept of ‘home bias’, which is a tendency to make two mistakes: trust the easily accessible information about your home market that you know well and, conversely, distrust non-home market information that does not conform to your experience. This can result in inappropriate shortcuts being made when doing deals in the home market (and reliance more on ‘gut’, as we will discuss later).

“There is a big factor of knowing the market and having a certain network too.”Those that really want the deal to succeed usually find ways of getting the information.

“We have looked at deals in South America, China, India and Australia, but the team that is based here is mainly focusing on [the home] region. We simply have our expertise here and try to focus on what we think we know best.” [said by a European company]

“We can act more quickly in a domestic deal because we don’t have to do as much due diligence.”

Interestingly, when moving away from the home market, more time is spent gathering information as there is less reliance on in-house expertise and managerial instinct about those foreign markets, thus there is also greater use of external experts and advisors.

Final decision-making

The senior managers whom we interviewed claimed that the final decision-making process is rarely influenced by information scarcity or home bias because the importance of the final decision and the process which leads to it makes this crucial period more rational and data dependent. Senior managers felt that unbiased information would ultimately be available prior to the final decision:

“The information is fairly easily accessible and those that really want the deal to succeed usually find ways of getting the information.”

“Look, it’s not so much about the actual information, because you can get most of the diligence done. There are data rooms and you can get advisors on board to increase the good result outcome.”

“If there is very little information about the deal, it would naturally create nervousness. But generally I would say they always find ways to overcome the hurdles. It’s not a huge issue most of the time.”

Others, typically further down in the organisation, outlined the challenge of information accessibility as one of the most important elements in the decision-making process. This was especially true when the deal was crossborder or in a(nother) developing country: “The information access is a big challenge for any deal, especially in the Eastern European region.” [said by a Western European company head]

“Because it was in Kazakhstan and it was a fairly small business where they don’t really have consolidated information and a procedure in place we could have used, we had to go out there and hold them by the hand in order to get through the due diligence process.” [noted by a company currently not operating in Kazakhstan]

“It’s that kind of slightly ‘intangible factor’, kind of ‘unknown risks’ really. Kind of ‘what don’t you know about how things get done in a certain geography’. That becomes a real challenge.”

Moreover, some of the experts we interviewed noted the importance of information accessibility during hostile M&A transactions where the target company is trying to resist the takeover

“When you get that type of emotion [hostility] in any acquisition, then people from the target companies start putting up barriers.”

“Of course, when you start talking about hostile acquisitions, it is a totally different ball game.”

Nevertheless, these hostile deals still do proceed even without full information, usually due to the application of similar data either from the target company itself or general knowledge of what is publicly available.


Affect heuristics

Intuition, gut and instinct were all mentioned as important factors in making decisions about whether to acquire a company and, moreover, throughout the remaining deal process. CEOs get to where they are at the top of a company because they have made right decisions in the past. They expect that this will continue when they consider an acquisition or merger, and they apply their prior experience to the deal situation.

A classic example of this was when Quaker Oats purchased Stokely-Van Camp, owner of the sports drinks company, Gatorade: One of Quaker Oats’ most successful diversifications was the acquisition in 1983 of Gatorade, a sports drink company. Under its new ownership, Gatorade had grown tremendously and contributed to the feeling within Quaker Oats that because its main business was mature, it should focus on ‘investment in brands with high growth potential’. The purchase of Gatorade had also been William D. Smithburg’s greatest achievement at Quaker Oats since his appointment as CEO in 1979, although it was reported at the time that he had bought the company based on ‘his taste buds’ rather than a more serious market and valuation analysis.

The unfortunate end of this story is that several years later Smithburg bought another drinks company, Snapple, for $ 1.9 billion, similarly relying principally on his gut feelings about Snapple and following an inadequate due diligence process. Less than three years later, and after significant operating losses, Snapple was sold for only $ 300 million.“We call it the ‘larger yacht syndrome’.”

Respondents, who were key investment decision- makers themselves, stated that some decisions are driven by a ‘gut feeling’, others give a satisfactory ‘buzz’ and that the negotiation process excites as if ‘playing a game’. But these are also the same managers who are likely to trust (over-trust?) their own experience of the market in making the occasional M&A recommendation, as Smithburg of Quaker Oats did in the case above.

In addition, the following comments were made illustrating this behavioural factor in M&A deals where ‘gut’ and ‘playing the game’ are influencers: “The deal will never be finalised based only on ‘hard information’ or on numbers. Never. Only when the managers meet and say, ‘OK, is this a good deal for you and for me, we like each other, we trust each other…’, then the deal gets done.”

“We all want to prove we are bigger and better”

“We call it the ‘larger yacht syndrome’. When you sail to St. Tropez and see that there is someone moored next to you with a bigger yacht, then you want to beat him. You always want to win that race. So you go out into the market and acquire another company. Now you’re big!”

“You know Darwin’s theory of natural selection? That the strongest only survive?”

“People simply feel the need to make an acquisition. And I [as CEO] have felt the need in the past to make an acquisition. You grow the company organically and when a certain time comes, you feel ‘right, now I am going to start buying companies’.”

In Moeller & Brady (2007), there is a description of what they call a ‘run-away deal’ – one where the deal is difficult to stop once the acquisition or merger process has progressed beyond a certain point (especially after it has been made public). The interviewees noticed this as well: “There is a risk that people get ‘deal fever’ as it were. Related again to the risks … that people get carried away with the transaction.”

“Up to that stage [of price agreement] you get a buzzy feeling. Up until agreement, it is fun, just before you agree the price. Once you have agreed the price, it’s gone.”


There are, of course, many other factors that affect M&A deals. ‘Personal legacy’ is one, for example, and it is closely related to the ‘hubris’ concept discussed earlier. A number of situations were described during our interviews where the CEO felt the urgency to do a deal because of his or her need to put their mark on the organisation within the relatively short time that they would be in charge of the company. A study conducted in 2009 at the M&A Research Centre at Cass Business School (What Should I Do Next? CEO Succession, M&A Deals and Company Performance) found that the average tenure of a CEO in Europe is only 4.4 years.

“Every CEO is excited about a certain deal depending on how he sees his own future in the company. Whether his personal status and financial welfare would gain or lose traction in such an affair…” “Another subtle part of any deal is that any CEO while reviewing our proposition would firstly think, ‘Is this a beneficial transaction for me?’” But this is not to say that some deals will not be more rationally decided on strict strategic and financial terms than others. Such deal processes do exist, but in our interviews at least these were seen to be the exception rather than the rule, and even when such a strict process is put into place, there are still behavioural influences: “Don’t believe it for one minute when someone claims that the acquisition decision was solely for the financial reasons stated. There are always egos involved. CEOs and boards do deals for personal reasons.”

…which is perhaps a good summary of these very personal behavioural biases that many deal-makers may not even acknowledge as having an impact on the deal process.

There are also differences, especially related to the ‘illusion of control’ factor, between the managers of large corporations and the leaders of smaller entrepreneurial companies. Entrepreneurs and smaller company managers tend to have actual, not just the ‘illusion’, of control, whereas the final decision made by a CEO running a large corporate institution will ultimately need to be approved first by the board of directors and then a majority of the shareholders. This distinction between large and small companies does require further investigation. In addition, further research is necessary to understand the full impact of all of these behavioural factors and to expand it beyond our small survey which focused on European managers.

In summary, our research should provide some guidance to those who are in the process of considering an M&A deal or advising a company to do such a deal. Knowing the inherent human biases that will be introduced into the process is the first step in designing a better process to alleviate at least to some degree the negative impact of those factors and, in fact, to channel them to assist, rather than impede, deal success. CEOs need to understand better their own biases, and boards should as well. Then it may be possible to improve the success rate of M&A deals so that 70% succeed, not fail.

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