The first wave of mergers and acquisitions (M&A) that took place in Greece between 1997 and 1999 brought only disappointment, according to a study conducted by the Athens University of Economics and Business. The university judged the success of M&A on the performance of companies before and after the event, using their return on assets (ROA). «The empirical results showed that nearly six out of 10 M&A reported deteriorating results,» the study pointed out, and added that «the results are in accordance with the outcome of corresponding international studies.» The researchers noted that during the period 1998-2000, Greek companies were not yet affected by the stock market malaise and the subsequent global recession. The majority of the smaller companies, or 63.6 percent, reported negative performances, while 66.7 percent of medium-sized companies and 44 percent of the big firms said they had negative results. Businesses which had previous M&A experience also did better than those which did not, with only 54.2 percent reporting declines in results against 66.7 percent of the first-timers. Free float also played an important role as 73 percent of companies with a big free float said their results worsened compared with 50 percent of business with small free float. Listed companies also suffered more than their unlisted counterparts as close to 60 percent of the former said their results declined, while only 50 percent of the latter group reported diminished results. The study also noted a significant divergence between initial expectations and the actual results as characterized in profits, sales, market share and share price. A hefty 62.5 percent of companies said their expectations were confounded, only 11.1 percent said their assumptions were met, and 26.4 percent said their expectations were more than satisfied. The biggest problem concerned expectations over the share price with an average 22.9 percent saying that it was lower than expected. Companies said the biggest divergence between expectations and actual fact was in the organizational setup, the effectiveness of the organization and the financial result. They also reported positive surprises relating to the strength of the targeted company in the market, technological capability and the ability of company executives. The conclusions from the survey showed that acquiring companies tended to over-estimate the benefits of M&A, especially in terms of profits and sales and the response from investors as mirrored in the share price. They also underestimated the targeted company’s market strength, its technological expertise and executives’ talent. According to international findings, the success or failure of M&A depends crucially on the level of preparation before the deal is signed. The study by the Athens University of Economics and Business showed that one out of two Greek companies had prepared for changes in the days following the M&A. Over half (52.8 percent) the businesses said they had prepared for organizational changes and staff changes, 44 percent were ready for product-range changes and only 34.7 percent prepared for changes in internal procedures and production. The size of the acquiring company also played a role, with 44 percent of big companies drawing up written plans for changes against 63.6 percent of small businesses. «This result is not consistent with logic,» the researchers said, «as we expected the bigger companies to be more organized and more rational. The only explanation is that the bigger companies did not pay due attention to the merger.» Finally it is especially interesting that Greek companies generally avoided redundancies compared with their international counterparts. One third of the companies did not sack employees while for 17 percent of businesses up to 5 percent of the work force were fired.