While the canard that many mergers fail to provide a return to shareholders does not appear to be supported by the data, mergers still occur that appear to be motivated by little more than a CEO’s desire to boost his company’s revenue--along with his compensation base--rather than long-run profits.
Today’s investors--and corporate board members--are more sophisticated and demanding than in the past, and no longer meekly go along with a CEO’s grand plans unless they are supported by a compelling rationale and substantial evidence that they will produce value.
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