Study Reveals Pressures Behind Mergers, Acquisitions

ByJonathan Katz As mergers and acquisitions (M&A) continue to proliferate in the corporate world, many senior executives are facing new pressures, according to PricewaterhouseCoopers' third M&A survey, "Speed Makes A Difference." The survey, which polled senior executives from 125 worldwide companies that have completed a merger or acquisition within the last two years, revealed executive insight regarding mergers and acquisitions. The major findings include:

Companies acquire to gain more management and technical talent as well as build revenue and market position by gaining access to new markets, new products, and a bigger share of the market.

Although companies achieved their revenue goals, fewer than 40% of the respondents reported meeting their cost-cutting targets.

Nearly three out of four companies reported problems integrating information systems, which caused delays, lost revenue, and missed opportunities.

Operating system differences and philosophies must be resolved early to avoid quick deal-value depreciation.

Speed is a vital component in successful deal-making. About 80% reported a need for faster execution.

Early use of transition teams builds employee morale, focus, initiative, and decision-making, while it reduces absenteeism, turnover, and internal strife. "What's left out of the headlines about megamergers . . . is the enormous pressure deal-makers face in making the transaction work, both from a financial and operating perspective," says Greg Peterson, a leader of The Accelerated Transition team at PricewaterhouseCoopers.