Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...
By Yin Wilczek
March 9 — Poor preparation for the post-merger period is one of the main reasons merger and acquisition deals don't achieve their projected benefits, a new report from Deloitte LLP finds.
Survey participants responding to Deloitte's 2015 Integration Report also cited information technology as the functional area most in need of improvement in terms of integration skills and capabilities.
“In this vibrant M&A environment, post-merger integration is a critical factor in achieving deal success,” Deloitte Deputy Chief Executive Officer Tom McGee said in a related release March 4. “The Integration Report provides insights into navigating potential challenges, while reinforcing much of what we advise our clients–effective integration planning and flawless execution are necessary components for capturing a deal’s full value.”
According to Deloitte's release, 2014 was a strong year for M&A activity, with more than 40,000 announced deals that reached almost $3.5 trillion in aggregate value. The statistics for January—in which there were deals totaling $232.9 billion—also suggest that M&A activity will be robust this year.
Deloitte's survey in November and December polled 800 executives from U.S. companies that were engaged in a merger and acquisition during the last two years, were planning one in the next year or both. Almost one-third of the respondents said their deals fell short of expectations.
Respondents also said that for future deals, they will focus on swifter and phased integration, as well as a more rigorous process to select an integration team.
The study suggested that some best practices may help ensure deal success. In addition to planning for a smooth transition from the very beginning of the merger, deal parties should:
• clearly understand what they expect to achieve from the merger;
• involve executive leadership from both the acquirer and target companies;
• develop an appropriate plan that optimizes the use of resources, budget and timing;
• establish a cross-functional post-integration leadership team; and
• ensure transparent and consistent communications with employees regarding the merger.
To contact the reporter on this story: Yin Wilczek in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan Tuck at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)