In 2021, we saw a record-breaking number of mergers and acquisitions (M&A) announced. Deal closures receive a lot of attention in the media but there is limited visibility to strategic objectives and integration plans companies have had in connection with M&A transactions and how companies have succeeded in realizing the plans.
Our study indicates that market extension has been the main driver for M&A. Digital transformation has also had a key role in the M&A strategies of companies which have made a lot of acquisitions during the past 5 years.
During the interviews, we found that companies with a lot of experience from M&A integrations have proven concepts in place and they succeed in the integration projects, against the general view that integrations would not fulfill their targets.
The most prominent factors we found to be repeatedly present in the companies which have been able to successfully complete their M&A integrations are the following:
Even though most of the interviewed companies were acquirers, the study also indicated that the effort associated with carve-outs should not be underestimated. Especially if the seller is a large corporation and only a portion of the business is included in the transaction, the carve-out and separation can require substantial effort. However, it is worth noting that the respondents of this study have been focusing on acquisitions instead of the sales of businesses, hence the study did not widely capture sellers’ perceptions.
Director, CFO Advisory