Computers snarled customers' accounts, teller lines snaked outside some bank branches, and the bank's share of Florida deposits sunk. In both cases, the banks ultimately fixed the service problems and started winning back customers. The bigger, and more long-term, risk of a mega merger is that, after the deal is done, it doesn't result in a better company, experts said. Ghadar examined 40 years of data on the global market share of companies in more than 20 industries, including banking. He said it showed the assumption that a big company can thrive only by merging with another big company is false.
Some mergers work.
If a company needs key technology and buys another company that has it, that deal often succeeds, Ghadar said. Or if a company buys another to take advantage of its highly efficient back-office operation, that too can succeed, he said. None of those conditions is in place in the First Union-Wachovia deal. Some of the biggest bank mergers have been unsuccessful or at least suffered rocky starts, stock analysts say. Executives from the two banks didn't work well together, which hurt the new Bank One's ability to move forward.