This has especially affected the financial sector. The creation of the Euro currency has created a much larger capital market in Europe. In the USA, changes in the laws regulating the financial industry have made consolidation much easier. Mergers can fail because the two partners cannot agree terms - for example, who will run the new company. This seems to have been the reason why one of the biggest UK mergers, between pharmaceutical giants Glaxo and Smith Kline Beecham, collapsed.
Mergers can also run into regulatory problems.
Governments may be concerned that the merger might create a monopoly, and either block it or require the merged companies to sell some of the firms which are part of their business empire. Finally, mergers may not produce the kind of benefits promised. Cost savings may fail to materialise, for example. The BBC is not responsible for the content of external internet sites Links to other Business Basics stories are at the foot of the page.