There are many reasons M&A deals fail to close. Macro factors, like changes in tax laws, an economic slowdown, or an unexpected rise in interest rates, can cause a transaction to fall apart. Likewise, a sharp decline in the buyer’s stock price, a change in strategic direction from their Board of Directors, a shortfall in their bank financing, or some other shift in the buyer’s world may lead to them walk away from a deal.
In my over twenty years of leading M&A transactions, however, I’ve seen fully three-quarters of failed M&A deals happen because of an unexpected seller-related development, revelation, or discovery. Something comes to light about the target company that the buyer wasn’t expecting.
