 Mergers are said to create synergy if the value of a combined firm is greater than the sum of the values of the independently participating firms in the particular merger deals. Let's see using some empirical data whether the mergers have created some value. To determine whether the mergers create some value, an event study is the best approach. In this approach, abnormal stock returns on and around the announcement dates are estimated. Whereas abnormal return is the excess return of an actual stock over the index return. Empirical merger studies show some mixed results in the US. In USA, these studies show some value creation between the period of 1991 to 1997. Whereas from 1998 to 2001, these studies show some value destroyed by mergers. Now the implications of these event studies is that the abnormal returns are taken only around the time of an acquisition. Whereas in efficient markets, short term returns provide an unbiased estimate of the total effect of the mergers and long term returns also reflect the impact of many unrelated events. Now what are the returns to the bidder in a merger transaction? If we see the data on the screen, we see that there is a positive average abnormal return for the entire sample period. If we see between this period, we can see that the large losses occurred from 1998 to 2001. Whereas in that period 2000, the losses were the largest. Let's see what are the benefits or value created for the target companies. Acquisitions generally benefit target firms shareholders. But studies show quite high average premium over the entire sample period of 1973 to 1998. The implications for this study is that if doubtful of resistant target managers because these managers may be scared of the loss of their individual jobs. And implication is that the premium may be a hurdle for the acquirer. The acquiring firms stockholders will lose if the premium is exceeding the absolute value of the synergy. Let's consider now the behavior of managers of the bidding firm. We see that there is a little contact between managers and the stockholders in a corporate form of organization. Managers are argued to be the worst decision makers despite of highly paid people, then the firms on shareholders. Managers favor acquisition because of one reason primarily that if it increases their compensation and prestige level as to the size of the acquisition gross. Research reports show more value creation on acquisition by firms that offer their managers lot of options. These options are basically some equity based compensation packages. Merger failures of large acquirers due to one reason and that is the managers small percentage in the ownership of the bidding firms shareholding. If managers have low cash flows then they are likely to run out of good and positive NPV investments. Whereas, if the managers have high amount of cash flows with them, there is a risk that may use extra cash on the bad and negative NPV investments just to protect themselves. Investments on value creation, value destruction and declined operating performances have been generally showed by the cash rich firms. Let's see how is the behavior of target firms managers. Target firms shareholders may also feel difficult in controlling their managers because of two reasons. One is the faring of being fired. The managers may resist takeovers using some defective tactics. The second reason is that if the managers are unable to avoid the takeover then the managers may bargain with the bidder for their own personal interest at the expense of the shareholders of the target firm. There are mergers of equal deals where both firms have equal ownership and representation on the board of directors of the newly formed firm after acquisition. Research shows low abnormal returns for the targets in MOE deals at the announcement date and beside this observation this percentage is negatively related to the target firms presentation of the post mergers board.