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What are some sources of inherent risk in mergers and acquisitions?

What are some sources of inherent risk in mergers and acquisitions?

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Answer #1

Sources of inherent risk in mergers and acquisitions are:-

1. Under/overvaluation of assets.

2. Over/Underpayment to the retained employees or discharged employees.

3. Non compliance with the laws which were not applicable before the merger but are applicable now.

4. Non achievement of economies of scale .

5. Insecurity amongst the employees.

6. non achievement of profitability margins.

7. inaccurate financial due diligence.

8. Governmental laws.

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