Dr Hari Mann
Sept 23, 2026
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Global M&A rebounded through 2025 and that momentum has continued into 2026. Larger transactions have returned and more capital is being directed toward investment rather than shareholder payouts.
However, periods of heavy dealmaking tend to expose the difference between organizations that have prepared their leaders for what comes next and those that assumed most of the work was done once the transaction completed.
Why transactions fail
70-90% of M&As fail or underperform
Regardless of the commercial logic of a deal, the vulnerability that comes after it is often much the same. The financial model runs to two decimal places and the legal work is exhaustive. Then the transaction closes and, surprisingly often, the value that looked convincing on paper never quite arrives. Research consistently shows that around 70% to 90% of deals fail to deliver the value originally expected.
The reasons aren't particularly difficult to see. KPMG's 2025 research found that 57% of acquirers destroyed shareholder value after completion, largely because they overestimated the synergies and underestimated how difficult they would be to achieve. The Harvard Business Review places culture and poor management of people at the heart of roughly two thirds of failed transactions.
EY's figures show 47% of key employees leaving within a year of an acquisition and 75% gone within three years, compared with a normal voluntary turnover rate of around 13%. The people who leave first are often those with the best alternatives, and they are frequently the same people whose knowledge, judgment or client relationships were part of the reason the company was attractive in the first place.
This all has a knock-on effect on productivity and organizational resilience. The damage usually starts early, often in the first 90 to 180 days but it can take another 18 months or two years before anyone formally accepts that something has gone wrong. By that stage, the explanation has often become "market conditions".
It can take another 18 months or two years before anyone formally accepts that something has gone wrong. By that stage, the explanation has often become "market conditions".
Industry-specific M&A challenges
The risk sits in different places depending on what you are buying, which is why generic integration plans can miss some of the things that matter most.
In energy and utilities, you may be bringing together a regulated organization and a much more entrepreneurial one. Safety culture cannot simply be written into a policy and circulated. A great deal of operational knowledge may also sit with long-serving employees in an ageing workforce, and when those people leave, decades of judgment about assets and operations can leave with them.
Engineering and industrial businesses face a different problem because so much of their value sits in project delivery and relationships. Clients often know individual principals and lead engineers far better than they know the corporate brand. Lose a few of those people in the first year and some of the revenue synergies used to justify the purchase price can disappear with them.
In pharma, you are acquiring scientific judgment. Research teams need to feel able to say that a molecule is not working or that a program should stop. That sort of candor can disappear quickly when people are wondering whether they will still have a job in six months.
Insurance has its own version of the issue. Underwriting discipline comes from the culture of an organization as much as from its technical rules. Bring together two firms with very different attitudes to risk without addressing those differences properly and the result can be a loss ratio nobody had in the model. Distribution relationships can leave just as easily.
An imperfect structure announced early does less damage than a better structure announced too late
How to succeed with post-merger integration
1. Prioritize imperfect plans over ambiguity
Organizations that manage integration well tend to make some important decisions much earlier, particularly around leadership. They decide who is running what before Day 1 rather than allowing uncertainty to continue for weeks after completion. An imperfect structure announced early does less damage than a better structure announced too late, because uncertainty at the top spreads quickly through the organization and slows decision-making everywhere else.
2. Resource culture like any other integration workstream
Cost synergies get owners, budgets, measures and regular scrutiny, while culture is still too often dealt with through a workshop and a values poster. That doesn't make sense when so much of the value of a transaction depends on how people behave once the businesses come together. Culture needs to be treated as real integration work and resourced in the same way.
3. Give leaders space to lead through uncertainty
Senior and middle leaders are particularly important during this period to secure employee buy-in. They are expected to keep teams functioning while also dealing with their own uncertainty about whether they have a future in the combined organization. Gallup's finding that one in two people who quit cite their manager becomes especially relevant during a merger. Those leaders need somewhere to make sense of what is happening, space to work through difficult decisions, and, at times, permission to tell their teams honestly that they don't yet have an answer. Our recent research offers six practical shifts to help leaders be “better”.
4. Don't rely on retention pay to keep your best people
72% of acquirers run retention programs, yet departures still rise once those payments have been made. Money can persuade someone to remain until a particular date, but it doesn't necessarily make them want to build a career in the new organization. High performers want to understand whether there is a credible future for them in the combined business, and whether the people making decisions actually understand what they are good at. If the organization cannot answer those questions, another employer may be able to.
What boards need to think about earlier
There is a similar pattern across many of the mergers, demergers and restructuring programs we work alongside at Hult Ashridge Executive Education. Senior teams are being asked to make consequential decisions faster, often with incomplete information and greater scrutiny. They need somewhere to think properly, test decisions before they make them, and work through disagreements before those disagreements start affecting the wider organization.
That capacity can be assessed before signing. Where there are gaps, the work can begin while regulators are still considering the transaction, giving the business months to prepare rather than a few frantic weeks after completion.
The alternative is discovering the problem around month 20, when somebody finally asks why the numbers look so different from the original model.
For me, that is the part boards need to think about earlier. Completing the transaction is difficult, but the harder work starts when two organizations actually have to become one.
Meet the expert
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Dr Hari Mann
Dean of Faculty at Hult Ashridge Executive Education
As the Dean at Hult Ashridge, Hari brings over two decades of experience in academia and business. His main interests are in strategy, innovation and entrepreneurship. Prior to joining Hult Ashridge, Hari held senior roles in investment banking and then later in Politics.
At Hult Ashridge, Hari has been the MBA and Executive MBA director, and more recently the director of Product Solutions. His research currently involves how financial organizations lead and innovate, and how purpose matters in increasing company profits.
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