MAXIMIZING YOUR MERGER'S POTENTIAL

"The year 2015 was already the biggest year on record for M&A deal volume when DuPont and Dow Chemical made their stunning merger announcement in the year’s fi nal weeks. While deals like Pfi zer-Allergan and DellEMC may still face regulatory hurdles, global M&A volume surpassed $5 trillion for the first time ever, standing at $5.03 trillion at the end of 2015, according to Dealogic.

 

Our analysis of deals spanning a 10-year period found that as a group, companies that engaged in any M&A activity averaged 4.8% total shareholder return compared with 3.3% for those that were inactive.

While the goal of squeezing more value out of M&A may be the right strategy, most acquirers are likely to fail at the mission: Too many companies simply underdeliver. In fact, overestimated synergies was the second-biggest cause of deal disappointment cited in our global survey of 352 executives." 

This article appeared on the Bain & Company website.