The article surveys theories of merger motives and relates them to prescriptions for merger
strategies. The theories of merger motives can be classified into seven groups. Those theories
arguing with private information, managerial empire-building or process infiuences are
better supported by evidence than those tracing mergers back to efficiency gains or monopoly
power. The explanations of mergers in terms of raider activity or macroeconomic disturbances
carry the least plausibility. Strategy authors have discussed mergers with respect to the
choice of acquisition mode, entry mode, and integration mode. The prescriptions on all
three topics are dominated by' the efficiency theory of mergers. For this reason they are
dangerous guides for participants in merger processes. On the other hand they provide an
efficient language for communicating one's position. The research in merger motives
should be redirected from the efficiency theory to explanations that build on decision
processes, conflicting goals, and ambiguous private information