In both cases, the banks ultimately fixed the service problems and won 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 notion that one big company thrives only by merging with another is false. Chances are, your competitor has a culture that is different from you, they have a market niche different from you, and when you blend these things together, you get something which is neither apples nor oranges - and which will appeal neither to people who like apples nor oranges.
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.