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M&A success & failures research

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M&A success & failures research

  1. 1. Mergers & Acquisitions: Part 1 2011 Research Project - Highlights <br />Steve Coote<br />Director, VSC Growth<br />Feb 2011<br /><br />Copyright © 2011. All Rights Reserved. VSC Growth<br />
  2. 2. <ul><li>VSC Growth has undertaken a comprehensive review of M&A success rates and integration methodologies
  3. 3. More than 70 technical papers reviewed from researchersand academics across the globe
  4. 4. Papers review of hundreds of M&As from North and South America, Europe, UK and Australia over a 30 year period.
  5. 5. Includes surveys and guidance to clients from the big global M&A practitioners </li></ul>The Research <br />
  6. 6. The Research - Diversity of opinions …<br />“Merger Paradox: The Strategic Role of Minority in Integration process”<br />“The Murder in Merger …Struggle Between Life & Death Impulses” <br />Cost of “Culture Clash”<br />The role of National Culture in Mergers & Acquisitions<br />2nd wave post-merger integration<br />Soft Keys and Hard Keys to Success <br />“Avoiding the Synergy Trap” <br />“Managing the Strategic Dynamic of Acquisition Integration: Lessons from HP and Compaq” <br />Thirty Years of Mergers and Acquisitions Research: Nothing Has Changed <br />“Delivering the promise” <br />“Corporations as stepfamilies” <br />These are indicative themes and extracts from the papers reviewed. References available on request.<br />
  7. 7. In summary, the most common conclusions are that:<br /><ul><li>Approximately 70% of mergers and acquisitions fail to achieve expectations and more than half destroy value
  8. 8. There are approaches that if applied will improve the likelihood of success</li></ul>The Research<br />
  9. 9. 1/3 Destroy Value<br />1/3 Maintain Value<br />1/3 Create Value<br />“70% CEOs believe their M&A’s were successful”<br />The Research… the truth in the myths<br />Value Created<br />“Only 30% are successful”<br />Value Maintained<br />“50% Destroy Value”<br />Value Destroyed<br />“70% Fail to achieve expectations”<br />Copyright © 2011. All Rights Reserved. VSC Growth<br />
  10. 10. The Research – Integration case study<br />Key stats:<br /><ul><li>Merger of HP & Compaq in 2002
  11. 11. Review date 2005
  12. 12. 150,000 staff
  13. 13. 1,500 member integration team</li></ul>The good:<br /><ul><li>Comprehensive planning
  14. 14. Processes established
  15. 15. Rapid realisation of cost saving goals</li></ul>The not so good:<br /><ul><li>Lost focus on long term strategy
  16. 16. Insufficient review & feedback
  17. 17. Insufficient management “bandwidth”
  18. 18. Failed to execute to completion</li></ul>Source Burgelman & McKinney 2006<br />
  19. 19. Framework for success - Introduction<br />With the benefit of the research, questions for those undertaking M&A remain:<br /><ul><li>If the evidence shows such a consistently average track record, and there is so much guidance on how to do it well, then why doesn’t it change?
  20. 20. If we want to improve our approach, what are the fundamental things we need to?
  21. 21. What support is available?</li></li></ul><li>Framework for success - Introduction<br />These questions are addressed in our presentation: <br />Mergers & Acquisitions Part 2 - Practical Framework for Success<br />The Framework combines our direct experience with the research to provide practical guidance to those involved in M&A<br />Contact Steve Coote on +61 412 148428 or<br /><br />
  22. 22. About Steve Coote<br /><ul><li>First M&A experience in 1995 as a parent company representative placed into an acquired company
  23. 23. 7 years as a Business & Division Manager developing growth opportunities
  24. 24. 5 years as General Manager Group Operations of listed global infrastructure services company
  25. 25. Since 2009, consulting to business on strategy, performance and leadership
  26. 26. Due diligence &integration >20 mergers in Australia, United States, United Kingdom & New Zealand
  27. 27. Involved in deals with acquiring company sizes 200 to 3100 and acquired company sizes 10 to 450
  28. 28. Ready to help your business improve M&A outcomes</li></ul>Steve Coote <br />BE (Hons), MAICD, MAIM<br />
  29. 29. Want a closer look at the research?<br />The full results of the research are presented in our: <br />Mergers & Acquisitions Part 1 – 2011 Research Project<br />The research has been combined with our direct experience to provide practical guidance to those involved in M&A<br />Contact Steve Coote on +61 412 148428 or<br /><br />