Table of contents
A new generation of M&A:
A McKinsey perspective on the opportunities
Despite continued uncertainty, signs point to a
surge in M&A activity that will be ambitious in
both scope and profile.
Beyond risk avoidance:
A McKinsey perspective on creating transformational value from mergers Most mergers are doomed from the beginning.
Anyone who has researched merger success rates
knows that roughly 70 percent of mergers fail.
Opening the aperture 1:
A McKinsey perspective on value creation
Almost 50 percent of the time, due diligence
conducted before a merger fails to provide an
adequate roadmap to capturing synergies and
Opening the aperture 2:
A practical guide to capturing synergies and
creating value in mergers
Most companies contemplate mergers with great
ambitions, but their vision quickly narrows to cost.
A McKinsey perspective on organizing
integrations to create value
Mergers offer tremendous opportunity to create
and sustain breakthrough value, especially for
companies that get three mutually reinforcing
Integrating sales operations in a merger:
A McKinsey perspective on four essential steps
Make no mistake: mergers are challenging. But
they can provide organizations with transformative possibilities.
Assessing cultural compatibility:
A McKinsey perspective on getting practical
about culture in M&A
Executives know instinctively that corporate
culture matters in capturing value from M&A.
Opening the aperture 3:
A McKinsey perspective on ﬁnding and
Best-practice companies explore the full range
of opportunities to achieve maximum value from
Perspectives on merger integration
A new generation of M&A:
A McKinsey perspective on the
opportunities and challenges
By Clay Deutsch & Andy West
Despite continued uncertainty, signs point to a surge in M&A activity that will be ambitious in both scope and profile. Even M&A veterans will require new tools for analysis and integration to manage these deals for maximum benefit – new organizational efficiencies, market expansion, employee development, product innovation, and profit. Mergers often accelerate in the second half of a downturn, which is where the economy seems to be these days. Prices are low. Competitors may be weakened. Businesses that may have disdained overtures, likely or unlikely, may be more receptive. Unusual numbers of executives and boards report seeing opportunities to make “once in a lifetime” deals. At the same time, economic uncertainty has left many organizations cautious. Executives may be excited about the prospects, but their boards may be less convinced and willing to act because they doubt the company’s ability to manage an ambitious deal successfully. A McKinsey survey of almost 90 M&A professionals conducted in mid 2009 showed new interests and attitudes toward mergers. Nearly half of those surveyed believed the deals they manage would “increase in transaction value” over the next three years. Respondents expressed great interest in using M&A to move beyond existing lines of business into new strategic areas and build their R&D portfolios. Of course, most acquisitions will remain focused on more traditional sources of value closer to existing lines of business, but any of these deals may bring opportunities to create transformational value that reaches far beyond the potential of conventional integration strategies. The survey and the M&A success of McKinsey clients indicate that transformational value can increase the return on an acquisition 30-100 percent. Identifying transformational value opportunities and managing mergers that stretch a company’s capabilities in new ways require a dramatic departure from the...
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