Seven Strategies Spur Successful M&A Deals

Compiled ByDeborah Austin Successful merger-and-acquisition deals -- those that enhance shareholder value -- have shown a healthy increase spurred by seven key strategic processes, indicates a recently released study by professional services firm KPMG LLP. About 30% of merger-and-acquisition deals from 1997 to 1999 enhanced shareholder value, the study shows, up from 17% in an earlier 1996-to-1998 study. And, the portion of deals that reduced shareholder value fell to 31% from 53%. The study identifies seven key practices rendering companies at least twice as likely to create rather than destroy value: early action, board-of-directors involvement, pre-bid value assessment, formal transaction process plan, process manager involvement throughout, process manager empowerment with wide-ranging role, and independent assessment of post-deal implementation. More U.S. companies (35%) than European (24%) are getting value from mergers and acquisitions because pre-bid assessment and issues management were stressed more in the U.S., suggests the study.