If remarriage has been deemed to be proof of the triumph of hope over experience, the business counterpart of remarriage must be the current trend toward mega-mergers, in industries like pharmaceuticals, telecommunications, financial services and building materials.

Research on mergers and acquisitions (M&As) has been strikingly consistent on a number of points. Firstly, a true merger of equals is a rare occasion, even if the term "merger" is used for public relations purposes. Usually there is a dominant party, the "acquirer", who becomes the owner of the "merged" entity.

Another research finding is that over half of all acquisitions fail to add shareholder value. Generally, acquisitions have been found to have a neutral to negative effect on the shareholder wealth of acquiring firms. There is a consensus among M&A observers that the acquisition process itself is largely responsible for what eventually turns out to be a bad takeover deal.

The acquisition process is fraught because it is essentially psychological and social in nature. Therefore, irrational processes dominate. The pretence and self-delusion that logic prevails tends to compound the dangers of a bad deal. The seven deadly sins of the acquisition process explain the misadventures of many takeovers.

CEO pride - researchers and observers of the M&A scene agree that acquiring managers' egos frequently outpace their logic during a takeover campaign. A leader article in the Economist earlier this year surmised that many mergers begin with sheer executive boredom.

Research bears this out. Dr Mathew Hayward and Dr Donald Hambrick, two professors at Columbia University, carried out a study of 106 takeover transactions in 1989 and 1992, each valued at $100 million plus. Their aim was to study the relationship between CEO "hubris" and the large size of premiums paid for some acquisitions.

Certain indicators of CEO hubris were associated with the levels of premiums paid - the acquiring companies' recent performance, recent praise for the CEO in the media, CEOs' self-importance measured by the ratio of their pay relative to the other executives in their firms.

On average, the study found losses in the shareholder wealth of acquiring firms, and these were correlated with CEO hubris. The conclusion is that CEOs possessed by hubris have a misconceived belief in their own powers to get better value out of a target company than its present management. By overpaying hugely for the company, they end up dissipating their own shareholders' value.

Impatience - once executives get involved in an acquisition bid, they get impatient to close the deal. The sheer excitement of closing in on the quarry exists alongside the anxiety that if there is a delay, another bidder might come in and trump them. This means that companies in a rush may fail to look before they leap.

Joining the bandwagon - megamergers are the order of the day, and there is a panicky feeling that a corporate endgame is being played out as the large players consolidate on a global basis. Is there a copy-cat effect and potential chain reaction here? For example, is Exxon "merging" with Mobil in reaction to the "merger" of BP with Amoco some months ago?

The more cynical observer will postulate that the trend in mergers is being fuelled by investment bankers, playing on the egos as well as the insecurities of chief executives. Whatever about the unfavourable outcomes of M&As for acquiring company shareholders, investment bankers are always winners.

Confusing ends and means - Many companies see M&As as a strategy. This is a mistaken idea. M&A activity is a means of achieving a strategy, not a strategy in its own right.

Even if a particular acquisition target seems like the most logical approach, there must be an upper limit on price, or the purchase will not create value for the buyer. Bidders can "lose the head" once they are on the trail of an acquisition candidate. The momentum of the chase begins to rule, and it becomes a matter of honour to "win".

Flawed evaluation criteria - in many instances, targets are evaluated on narrow financial criteria, on the basis that they will add to overall profit, without considering profitability or value. In effect, the company is not even factoring in the opportunity cost of the capital being invested. This phenomenon has been termed "profitless growth".

The evidence is that acquisitions based on the expectation of a financial coup do not earn as much as those based on strategic logic. In the latter case, the integration of the acquired company will create a fit that will deliver superior performance compared to those available to each company alone.

Incongruence among stakeholders - the senior management of the acquiring company often fails to take account of the diversity of interests of those involved in the deal. Other likely winners are the target shareholders, especially if cash is paid. Research shows that cash acquisitions are less successful than those paid for by paper. But companies desperate to get the deal finalised rarely set preconditions.

However, life is uncertain for other stakeholders - the acquiring shareholders and employees, and the acquired management and employees. Customers and suppliers may be subjected to a more powerful and, perhaps, less attentive trading partner. All of these unhappy groups have the capacity - and all too often the motive - to sabotage the company after the merger.

No implementation plan - this is best described as a concentration on the wedding rather than the marriage. The hard slog of post-acquisition integration is rather boring and anti-climactic compared to the thrill of the chase. So, once the deal is done, the acquiring senior management tends to opt out, leaving the rest to subordinates. Implementation may be regarded as a mere mopping-up job, but it is the hardest element of an acquisition.

No matter how good an acquisition looks on paper, it will fail unless the integration of the two organisations is well-executed. This should be planned in advance of the acquisition.

It is during this planning process that potential difficulties in integration will surface. And if these look insurmountable, it is best to walk away from the deal at this stage.

The engagements of Smithkline Beecham with Glaxo and of Bank of Ireland with Alliance & Leicester were apparently broken on the issue of who would be boss.

Unfortunately, those who perpetrate the seven deadly sins of the acquisition process are the least likely to be punished for them. Usually, others pay dearly.