Nearly Half of Corporate Mergers End in Breakup, MIT Research Finds

Nearly Half of Corporate Mergers End in Breakup, MIT Research Finds

Nearly half of all mergers and acquisitions eventually fall apart, taking an average of 10 years to unwind and destroying shareholder value in the process, according to new research from MIT Sloan Management Review published this week.

The finding—that roughly 50% of M&A deals are ultimately undone—challenges the conventional wisdom that most merger failures happen quickly or become obvious within the first few years. For CFOs and corporate development teams navigating what remains one of the highest-stakes decisions in corporate finance, the research offers a sobering reality check: the deal that looks solid today may be quietly unraveling over the next decade.

Henrik Cronqvist and Désirée-Jessica Pély, the researchers behind the study, identify two primary culprits behind merger failures: poor initial fit between the combining companies and unforeseen disruptions that emerge after the deal closes. The research introduces what the authors describe as a "research-backed framework" designed to help executives diagnose which deals are built to last and which ones are likely to fall apart.

The 10-year average timeline for unwinding failed mergers is particularly striking. It suggests that many deals don't fail spectacularly—they fail slowly, absorbing leadership attention and resources while gradually eroding value in ways that may not be immediately apparent to boards or investors. This extended decay period means that by the time a merger is officially unwound, years of opportunity cost and organizational distraction have already accumulated.

For finance leaders, the implications are clear: the traditional post-merger integration playbook, which typically focuses on the first 12 to 24 months after a deal closes, may be missing the longer-term structural issues that ultimately determine success or failure. The research suggests that the real test of a merger isn't whether the companies can combine their systems and eliminate redundancies—it's whether the strategic rationale holds up over time and whether the combined entity can adapt to market changes neither party anticipated at signing.

The framework developed by Cronqvist and Pély is intended to help executives spot trouble early, before years of value destruction accumulate. While the source material doesn't detail the specific diagnostic criteria, the emphasis on "initial fit" suggests that many doomed deals may be identifiable at the due diligence stage—if acquirers are willing to ask harder questions about strategic alignment rather than focusing primarily on financial engineering and cost synergies.

The research appears in the February 18, 2026 edition of MIT Sloan Management Review, part of the publication's winter 2026 issue covering strategy execution and leadership. The timing is notable: M&A activity has remained robust despite economic uncertainty, meaning finance leaders are evaluating potential deals against a backdrop where historical failure rates suggest caution may be warranted.

The question for CFOs becomes less about whether to pursue M&A—consolidation pressures and competitive dynamics often make deals necessary—and more about which diagnostic tools can separate the deals that will create lasting value from those destined to become decade-long distractions. The MIT research suggests that answer may lie in honest assessment of strategic fit and scenario planning for disruptions, rather than optimistic projections about synergies and integration timelines.