The common drawbacks of takeovers include: High cost involved - with the takeover price often proving too high. Problems of valuation (see the price too high, above) Upset customers and suppliers, usually as a result of the disruption involved.

Are takeovers good?

Are acquisitions good for shareholders is a question that's often asked. The research done on this seems to indicate takeovers are usually better for the shareholders of the target company rather than those of the purchaser.

Why is a takeover good?

Benefits of Takeovers

Enable dynamic firms to takeover inefficient firms and turn them into a more efficient and profitable firm. The new firm may benefit from economies of scale and share knowledge. Greater profit may enable more investment in research and development.