However, in the days that followed the share prices of the two companies dropped back as analysts asked how well the merger would work. Internet portal Yahoo said firmly no, and that it had no plans to enter into a similar deal. All too many mergers undertaken with the highest of hopes have failed to deliver. Too often culture conflicts and personality clashes hamper the new company's performance. There have been many problems with integrating the two firms, not least conflicts of interest between partners' investments and the giant group's audit client list.
Globalisation is the challenge, and for big business mergers are being seen as the solution.
The battle last year between three French banks over who should merge with whom might give the executives forging new deals cause to ask if the end result will be worth it. More than half of mergers ultimately fail to create shareholder value Commerzbank The six-month battle involving BNP, Paribas and Societe Generale was fought through advertising and in the courtrooms, two very costly arenas. Investors scrutinising the minutiae of the legal battles should worry if such a merger will create shareholder value. The chances are it will not - analysts agree that many mergers are hit or miss. Commerzbank research says that more than half of mergers ultimately fail to create value.