As M&A Intensifies in Asia, Down-to-Earth Advice on How to Make Deals Work

 

“Almost 30% of respondents said that their integration fell short of success,” the researchers report, with 18% indicating the transaction is not achieving the targeted synergies

So far this year, the world’s companies have completed 9,478 M&A deals valued at US$887.1 billion – up 23% from the first quarter of 2014 and the highest quarterly volume in eight years.

What happens the morning after? How can CFOs ensure that post-merger integration proceeds as planned, that synergy targets are met or exceeded, and that the acquisition contributes to the bottom line in the shortest time possible?

New research by Big Four accounting firm Deloitte sheds light on this issue. Executives from 803 companies in the US were interviewed last November and December “to help determine what drives successes, what foils deals, and what companies can do preemptively during the integration period to help increase the likelihood that their deals are the successful ones.”

The findings are instructive. “Almost 30% of respondents said that their integration fell short of success,” the researchers report. Eighteen percent indicated the transaction did not achieve the targeted synergies, while 10% were not even sure if they have reached their goal.