Why M&A Deals Fail
Companies that make multiple acquisitions are much more likely to have successful merger and acquisition (M&A) transactions than companies that have made one or less acquisitions in the past five years, according to a recent Boston Consulting Group (BCG) article. In fact, over 50 percent of all M&A transactions result in negative shareholder returns.The main culprits appear to be related to post-merger integration, especially:
- Poor integration of the target organization
- Higher complexity than anticipated
- Difficult cultural fit
- Synergies that fail to materialize
Other notable figures from the article:
- Chance favors the well-prepared acquirer. Over 35% of acquisitions stem from a “window of opportunity” when a specific target becomes available.
- Nearly 50% of M&A transactions result from a focused review of internal strategic portfolios or target search process.
- Almost 60% of all opportunities are immediately rejected, with only 14 % getting to due diligence.
M&A can create growth and value—but only when deals are well designed and effectively executed and integrated. If you need help with or have questions about increasing the success of a business sale, merger or acquisition, please contact Jim Leonhard at 916-800-2716 or jhleonhard@exitstrategiesgroup.com.
– See more at: https://exitstrategiesgroup.com/blog.html?bpid=4539#sthash.BTWMyFtt.dpuf
