This level of confidence in the benefits of deals today contrasts with dealmakers' underperformance of the market in previous booms by 6.4% in 1988 and by 2.5% in 1998.
The suggestion is that companies have learnt the lessons of past transactions, according to this study of 200 deals. In particular, senior managements have become more disciplined and attuned to shareholder opinions and interests.
They are also conducting more rigorous due diligence of financial, cultural and organisational issues, and therefore paying more accurate prices.
And in identifying people issues at an early stage, companies can achieve swifter and more effective integration. Early HR involvement and a focus on retaining employees are linked to the operational success of M&As, it is suggested.
Current M&A cycle creates shareholder value
Cass Business School/Towers Perrin, April 2006
Review by Steve Lodge.