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

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

Corporate mergers are failing at an alarming rate, with nearly half of all M&A deals eventually unwinding after an average of 10 years, according to new research from MIT Sloan Management Review published this week.

The findings arrive as finance chiefs navigate an uncertain deal environment in 2026, where the pressure to pursue transformative acquisitions competes with mounting evidence that most mergers destroy rather than create shareholder value. For CFOs evaluating potential deals or managing existing integrations, the research offers a framework for diagnosing which combinations are built to last and which are destined to fall apart.

Henrik Cronqvist and Désirée-Jessica Pély, the study's authors, identify two primary culprits behind merger failures: poor initial fit between combining companies and unforeseen disruptions that emerge after the deal closes. The research, which analyzed patterns across corporate breakups, reveals that these failures don't happen quickly—the decade-long timeline suggests that fundamental incompatibilities often remain hidden during integration efforts before eventually forcing a separation.

The implications for finance leaders are particularly stark. Failed mergers don't simply return companies to their pre-deal state; they actively destroy shareholder value while consuming years of leadership attention and resources. The 10-year average unwinding period means that executives who championed a deal may spend the better part of their tenure managing its dissolution rather than driving growth.

The researchers have developed what they describe as a "research-backed framework" designed to help leaders spot trouble early, before integration costs mount and strategic alternatives narrow. The framework focuses on evaluating both the initial strategic and cultural fit between merger partners and the organization's resilience to external shocks that could stress the combined entity.

For CFOs conducting due diligence, the research suggests that traditional financial modeling may miss critical warning signs. A deal that looks compelling on spreadsheets can still fail if the underlying organizational compatibility is weak or if the combined company lacks the flexibility to adapt when market conditions shift.

The timing of the research is notable. As companies increasingly pursue mergers to acquire AI capabilities, enter new markets, or achieve scale advantages, the near-50% failure rate serves as a sobering counterweight to deal enthusiasm. Finance chiefs must now balance the strategic imperative to act against the statistical reality that their merger is nearly as likely to unwind as to succeed.

The question for CFOs evaluating potential transactions becomes less about whether a deal creates value on paper and more about whether their organization can honestly assess its own integration capabilities and risk tolerance. The research implies that many leadership teams overestimate both, leading to deals that look inevitable in the boardroom but prove unsustainable in practice.