Study Reveals Pressures Behind Mergers, Acquisitions

By Jonathan 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.
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