M&A: learning from experience

Companies are starting to take a more systematic approach to M&A, a new survey from the Conference Board reports. Years of trial and error have produced a rich track record of dos and don'ts, particularly for 'serial acquirers', which are now being put to good use.

by The Conference Board
Last Updated: 23 Jul 2013

The report highlighted that having an established framework would flag up potential complications early on in the process. A more systematic approach would also render the integration process more transparent and defuse any political concerns that may arise. "More generally, having a well-oiled 'integration engine' brings a certain dynamism that encourages commitment to the objectives and goals of integration," notes the report.

The study includes case studies of companies such as Home Depot, which had clocked 21 acquisitions in 2005. Its director of strategic business development now manages the process of the group's acquisitions, while at Stanley Works, another highly acquisitive venture, dashboards track weekly, bi-weekly and monthly the progress of their acquisitions.

The Conference Board also highlighted key determinants in integration best practice. The degree of similarity between the acquirer and the target firm for instance seemed to be highly relevant: 93% of respondents said their target firm was completely or to a high degree from the same industry.

Nearly a third of companies, however, reported targeting firms outside of their geographic area, raising cross-cultural as well as corporate culture issues during the integration process.

Finally, the report observed that large acquisitions seemed to fare better than small ones, mostly because they mobilised the highest echelons of management and accompanying resources.

Source: Strategic M&A: creating tools and capabilities for successful integration
Report No 1401
The Conference Board

Review by Emilie Filou

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