The disadvantages of mergers and acquisitions are as following:

(1) Diseconomies of scale if business becomes too large, which leads to higher unit costs.

(2) M & A is within the scope of the Board of Directors to pursue and the company executives to initiate and execute. Since board members may also be subject to political, social, and personal interests, decisions seemingly in favor of the shareholders may also become quagmired with additional factors.

(3) Clashes of culture between different types of businesses can occur, reducing the effectiveness of the integration.

(4) Bad management and overestimating the valuation of the acquired corporation.

(5) May need to make some workers redundant, especially at management levels - this may have an effect on motivation.

(6) May be a conflict of objectives between different businesses, meaning decisions are more difficult to make and causing disruption in the running of the business.

(7) Failure to consider and/or incorporate the new company

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