abstract This paper focuses on the relationship between incentive asymmetries and some potentially undesirable outcomes along the mergers and acquisitions (M&A) process which could potentially destroy the shareholder value of the merged corporate entity. Incentive asymmetries are seen as belonging to the three categories of ‘risk-antecedent’, ‘information-antecedent’ and ‘pure self-interest antecedent’. We propose that incentive asymmetries are responsible for increases in the number of M&A projects and that they might create a ‘lemons problem’ with M&A candidates. Incentive asymmetries are also suggested to lead to prolonged contract-writing phases, biased financial evaluations and acquisition price escalation, as well as undermined post-M&A integration plans. If resolutions to these problems are sought, the use of high- and low-powered incentive schemes will need to reflect risk, information and pure self-interest.