That's hardly surprising when one considers how little time companies take before agreeing to merge. The Citigroup deal, from beginning to end, took less than five weeks. The $60 billion NationsBank-BankAmerica deal took three weeks, and the companies did "due diligence" in three days. How due, exactly, could that diligence have been? It's true that if a company lets a potential merger candidate look too closely, and the deal then falls through, it may have given away its secrets for nothing. But when you realize that people take more time to decide what car they're going to buy than Weill and Citicorp's John Reed took to decide on a $70 billion deal, a little uneasiness might be in order.
The truth is that everything--from the way investment banks are compensated to the rubber-stamp role of boards of directors to the dominance of publicity-hungry CEOs--is set up to make mergers attractive. And it's hard work to determine the success of mergers, because you have to compare the performance of the new company against the projected performance of the previously independent companies. That makes it easier just to assume success in the absence of complete disaster. But the chairman of a large Midwestern bank put it best when he recently said, "You get big because you're better. You don't get better because you're big."