After the highs of 2021, merger and acquisition (M&A) activity has seen its share of ups and downs. However, recent trends point to a bright future for 2025. According to McKinsey, deal value was up 12% to $3.4 Trillion in 2024. A range of global macroeconomic and geo-political factors will be in play in 2025 and beyond. But it is suffice to say that M&A activity will be robust and the changing nature of business and technological shifts is likely to change the nature and structure of future deals.
A New Era In M&A
The surge in M&A during 2020–2021 was fueled by unique pandemic conditions: low inflation and historically low interest rates created an environment ripe for deals. Deals going forward might look different: Investments in artificial intelligence (AI) and rapid technological advancements are reshaping the M&A landscape. The Technology, Media and Telecommunications (TMT) sector, which led acquisitions in 2024, is expected to continue its momentum this year.
Take, for example, some headline-making moves from 2024: Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks and Cisco’s $28 billion deal to acquire Splunk. Beyond traditional mergers, strategic collaborations are also making waves. The ambitious $500 billion Stargate projects uniting OpenAI, SoftBank, and Oracle are set to push the boundaries of technology collaboration and reshape industries.
No, Mergers Are Not Doomed To Fail
As we look at the future of M&A, it’s important to address the elephant in the room. Many of us have heard that “70% of mergers fail.” This view was popularized by David Harding and Sam Rovit in their book Mastering the Merger, which cited high-profile failures like Daimler-Chrysler and AOL-Time Warner. However, the M&A world has changed dramatically over the past decades. Recent research by Harding and Bain & Company shows that nearly 70% of mergers now succeed, and even those that don’t still create some value.
What’s become increasingly clear is that the absence of a strong integration strategy is one of the top reasons deals fall apart. In fact, a 2023 analysis by Bain & Company found that 83% of practitioners involved in failed deals cited poor integration as the primary cause. Among the top contributors to failure were the inability to retain key talent, misaligned or siloed integration teams, and the failure to realize anticipated revenue synergies. Simply put, even the best-laid plans on paper can unravel quickly without a thoughtful, people-centered approach to integration.
These challenges seem daunting, but not completely undoable. M&A today aren’t doomed to fail when managed well, and they can create businesses that are built to last.
7 Merger Missteps And How To Avoid Them
Despite the improved success rate, many challenges remain. Here are seven common missteps that leaders must avoid, along with strategies to navigate them successfully:
1. Neglecting Cultural Due Diligence
Culture is not a “soft” concept—it’s a strategic lever. It defines how decisions are made, how people behave, and how work gets done. Gallup emphasizes that culture is the emotional glue of an organization, and without acknowledging that, even the most promising deals can unravel. Picture integrating a company driven by hierarchy and process with one that thrives on autonomy and agility—without first mapping those cultural dimensions. The result? Frustration, disengagement and sluggish progress.
What to do:
- Conduct a cultural audit during due diligence. Use tools like interviews, behavioral assessments and engagement surveys to surface values, leadership styles and decision-making norms.
- Hold early cross-functional culture conversations. Early, transparent culture dialogues increase odds of integration success because various systems, processes and operational infrastructures start communicating from the get-go.
2. Ignoring Employee Engagement And Communication
Change breeds uncertainty—and mergers amplify that tenfold. Gallup’s latest data on the “Great Detachment” shows that employees are increasingly disengaged, unclear on expectations and disconnected from their company’s mission. During an M&A, this can deepen quickly if leaders don’t actively manage the employee experience.
Employees don’t just want updates; they want to be seen, heard and valued. When communication is vague or top-down only, it breeds fear and rumor. But when employees are engaged in the journey, they can become powerful advocates of change.
What to do:
- Start two-way communication early. Host town halls, listening tours and pulse surveys to understand what people are experiencing—and act on that data.
- Share the “why” behind the deal. Clear, purpose-driven communication helps accelerate trust and reduce attrition during transitions.
3. Overlooking Leadership Alignment
Leadership incompatibility is the silent killer of M&A momentum. One of the biggest mistakes in M&A is overlooking cultural and leadership fit. Strategy and financials get all the attention, but how leaders work—and what they expect—matters just as much.
Psychologist Michele Gelfand explains that cultures can be “tight” (structured and rule-bound) or “loose” (flexible and informal). When companies with opposing styles merge, the clash can be costly—averaging $200 million in lost net income within three years. In some cases, the loss tops $600 million.
When leadership teams fail to agree on shared values, strategic priorities, or how decisions are made, it creates confusion that cascades down through the organization.
What to do:
- Prioritize leadership integration. Align leaders on not just the “what” but the “how”—values, communication norms, and collaboration.
- Facilitate joint strategy offsites and alignment sessions. When leaders from both companies connect early—in a spirit of openness and collaboration—they’re far more likely to stay aligned before, during and after the deal.
4. Focusing Solely On Financial Metrics
Financials are essential—but they’re not sufficient. Multiple studies on M&A all converge on this point: qualitative factors like purpose, trust and culture are leading indicators of long-term M&A success. Yet, they’re often treated as “soft” or secondary.
Over-indexing on spreadsheets while underestimating human dynamics is like buying a house based solely on square footage, ignoring whether it feels like home.
What to do:
- Balance the scorecard. Combine financial KPIs with human-centered metrics like engagement, retention and cultural alignment.
- Involve HR and culture leaders in diligence. Early involvement of people leaders can reduce talent-related surprises post-close.
5. Over-Relying On AI For Due Diligence And Integration
AI can surface patterns, flag risks, and speed up data crunching—but it can’t replace the human touch. Bain & Company found that 21% of M&A professionals are now using generative AI for integration planning. It’s a powerful co-pilot (pun intended) —but it lacks emotional intelligence.
AI can’t tell you if employees feel betrayed by the deal or if two leadership teams silently distrust one another. That insight only comes from listening, empathy and face-to-face interaction.
What to do:
- Use AI to augment, not replace. Let AI do the heavy lifting on data, but prioritize human insight for sensemaking and storytelling.
- Blend tech with empathy. Set up human-led integration teams to interpret and act on the emotional signals AI can’t detect. No new technology can replace what a thoughtful culture audit can reveal. It gets to the heart of how people actually work, lead and collaborate.
6. Disregarding The Unique Strengths Of Each Organization
Too often, M&A feels like a cultural takeover. When one company’s culture dominates, it can trigger resistance, erode morale and stifle innovation. Organizations that intentionally preserve the best of both cultures are likely to see more success – because each feel valued and respected during and after the deal.
Instead of asking “Which culture wins?”, ask “What are we building together?” This mindset shift fuels mutual respect and unlocks new synergies. This is important regardless of whether it’s a merger of equals or a larger company acquiring a smaller one.
What to do:
- Map each organization’s cultural strengths. Use employee feedback and other strengths assessments to identify what people value most.
- Co-create a future culture. Invite employees into the process to define shared values, symbols, rituals and ways of working.
7. Failing To Integrate Culture Into The Integration Plan
Culture isn’t an add-on—it’s the foundation of integration. And when culture is ignored or mishandled, it can derail even the most carefully planned integration. Getting it right, though, can be very profitable. McKinsey research shows that companies that manage culture effectively in their integration planning are around 50 percent more likely to meet or exceed their synergy targets—across both cost and revenue synergies
What to do:
- Build culture into your integration playbook. Set milestones for leadership alignment, team onboarding and employee rituals.
- Track progress. Use engagement surveys, retention metrics and qualitative feedback to gauge cultural integration in real time.
The 70% Miracle – Moving From Risk To Reward
As we look ahead to 2025 and beyond, recognizing and addressing the common missteps in M&A isn’t just helpful—it’s essential. M&A activity is gaining momentum again, but it’s also evolving to keep pace with an era shaped by AI, global disruption, and shifting expectations.
What used to be a risky bet—with failure rates hovering around 70%—is now showing signs of real success. That turnaround isn’t luck. It’s the result of intentional strategy, early alignment, and a growing understanding that people and culture matter just as much as numbers and synergies.
Successful M&As today are led—not managed. They reflect leadership that respects the complexity of integration and prioritizes the human side of business. When leaders take a holistic approach, combining financial rigor with cultural insight, they don’t just avoid failure—they build something better than either company could achieve alone.