For many businesses, the opportunity to merge with or acquire a competing business is an opportunity that can't be passed up. Not only does it increase your profit, but it also increases your visibility in your business sector, which allows you to branch out into a different area of business. This can bode well for you if you have the right people in charge. When this opportunity knocks, you rarely see it passed over.
While the majority of mergers and acquisitions are completed, there have been a few that were not or should not have been. However, the money outweighed the better judgement of those involved. There are several reason why some mergers and acquisitions don't work out. The few that stand out often involve the deal favoring one brand over the other. Inexperienced people are put in charge of the deal. But, one reason that is rarely talked about is the reputation that the two businesses have.
Emphasizing having a positive reputation can never be overstated, but most of the time it is understated and can cost your business dearly if you choose to merge with a company with a negative reputation. In my opinion, there is no amount of money that can be made to overlook the shortcomings and negative reputation of a company that you are choosing to merge with. You must keep in mind when you merge or acquire that business you are taking on has it's problems as well. So, be prepared to do major damage control.
For companies that merge and have a bad reputation, that might be the smartest decision to make. If you are unable to shed the negative rep that follows you, what better way to take the heat off of you then to merge with a bigger company with the hopes of having their good reputation rub off on you. While this is a good reason for one company, the damage might be too much for the other company. Therefore, they might be willing to partner until they see that your reputation has improved or they feel they can help improve it themselves.
Mergers and acquisitions have been good for a lot of businesses and can be very lucrative for all parties involved. But before you sign that line, check the reputation of that company. You never know what might pop up later down the line that might have a damaging effect on your clean reputation