http://afr.sciedupress.com Accounting and Finance Research Vol. 7, No. 3; 2018 Published by Sciedu Press 211 ISSN 1927-5986 E-ISSN 1927-5994 The Reasons and Evaluations of Mergers and Acquisitions Bader Almazur 1 , Augustine C. Arize 2 , Giuliana Campanelli Andreopoulos 1 , John Malindretos 3 & Alex Panayides 1 1 Department of Economics and Finance, Cotsakos College of Business, William Paterson University, USA 2 Regents Professor, Department of Economics and Finance, College of Business, Texas A&M University-Commerce, USA 3 Department of Economics, Finance and Global Business, Cotsakos College of Business, William Paterson University, USA Correspondence: John Malindretos, Department of Economics, Finance and Global Business, Cotsakos College of Business, William Paterson University, USA Received: July 21, 2017 Accepted: June 15, 2018 Online Published: July 9, 2018 doi:10.5430/afr.v7n3p211 URL: https://doi.org/10.5430/afr.v7n3p211 Abstract This paper looks at mergers and acquisitions of companies. Specifically, the paper reviews the backdrop of mergers and takeovers, their history, types and reasons, prospects of productivity, synergy, growth, reduction of risk, and associated challenges. The analysis is conducted in the light of mergers and acquisitions in Europe and the United States, which are hotbeds of M&A activities. Through the selected cases, different pre- and post-merger situations are carefully analyzed. The findings are presented in both quantitative and qualitative forms, and the discussion elucidates the findings in light of existing literature on mergers and acquisitions. The paper concludes with solutions to some of the key challenges that mergers and acquisitions face. This exposition contains both text and graphical information and representation of information regarding mergers and acquisition and it provides succinct but relevant analysis of mergers in the 21 st century. Keywords: acquisitions, mergers, tax law, leverage, synergy, efficiency, growth 1. Introduction Under the backdrop of economic globalization, enterprise internationalization is spreading around the globe. To bolster the international competitive state and initiate global business strategy, conglomerates are embracing large scale, far reaching cross-border mergers and acquisition wave. Through international mergers and acquisitions, multinational firms have prospects of bypassing barriers and investment risks in their home countries. The 21 st century has been a time of intense mergers and acquisitions activities in both developed and developing nations. The mergers and acquisitions are a direct result of rapid growth of economies, economic globalization, and economic strategies initiated by governments that are keen on capitalizing on the potential of the international markets. From the annexation of IBM’s personal computer division in 2004 to the announcement of the Lenovo Group, the global market is witnessing an increase in mergers and acquisitions. It is not a secret that mergers grapple with sustenance and risk failure. According to a study conducted by KPMG, 83% of the mergers do not bolster the returns of the shareholders. Historically, mergers have been known to suffer the two-thirds loss of value on their shares in the stock market (Bhringu & Suri, 2011). The motivation behind mergers and acquisitions can be flawed. In many instances, there are delicate issues surrounding the attempts to make merged entities successful. Mergers are usually majorly driven by one common factor, which is fear. Globalization and technological developments have greatly influenced the global economic landscape due to their direct impact on the administrative decisions at the firm level. When a firm is merged or acquired, the decision is majorly based on a market fit or product, but differences among employees are normally ignored. It is a monumental mistake to assume that worker issues are easy to manage and overcome. CEOs who fail to look at the issue with the gravity desired may not like the eventual outcome of their inaction. This paper looks at the changing human resource dynamics in merged and acquired firms and highlights the challenges that the merging and acquisition process brings to the performance of the new firm. The point of my paper is to understand that merging firms stand to gain greater benefits in terms of performance than the perceived personnel