When two companies announce that they are merging, the last thing in their minds is probably the possibility that the merger may fail to produce the anticipated synergies. In some cases, however, mergers may fail and the combined company may break itself up similar to the case between Time Warner and AOL that we discussed in the first M&A lecture.

There is a type of merger that fails more often than others: Cross-border mergers, those that involve companies from different countries, fail more often than domestic mergers.

Why do you think that cross-border mergers fail more often than domestic mergers? What could be some possible reasons?