M&A Blog and News
We talk a lot about various failure factors from a standpoint of helping executives recognize what to do and not do in the midst of a live and fast-moving deal. But not all failure factors are created equal, as they say. For my two cents, avoiding an epic failure during integration all begins with a clear understanding of what we like to call “Deal-type DNA,” or the fundamental code of what really drives value in a given transaction.
Focusing on Key Elements in the Life Cycle of the M&A Deal
By Jack Prouty, President M&A Leadership Council
There’s an old saying in the M&A business, “Bad planning and execution will kill a good deal every time, but the best diligence and integration will never save a bad deal.” For valid reasons, there’s so much attention placed on failure factors in due diligence and integration that the role of deal strategy in overall M&A success or failure is easy to overlook. The reality is that there are just as many strategy-related failure factors.
It was a real joy to attend the recent Art of M&A Integration workshop in San Francisco, not from the eyes of a presenter, but from a participant’s viewpoint. As usual, I opened and closed the session, but this time I took the chance to really observe our great presenters and take in the unique combination of experience, talent and rich content the Council brings to training in the niche of M&A. In just three days the workshop attendees received the best information, tools, case studies and raw opinions one could hope to receive in a training environment.
"....Global expansion has been a major growth initiative for companies around the world for decades, and it continues to be a powerful source of new customers and products as well as a means of access to critical talent and attractive cost structures. It also is a complex, multidimensional dynamic — and the motivations are frequently different. For some companies, the goal is growth by expanding into new geographies.
A number of years ago a very large Oil & Gas company acquired a major competitor in a hostile take-over. It was a multi-billion dollar transaction and a key objective was to retain and relocate up to 85% of the professional and technical staff from Fort Worth, Texas to Houston, Texas. If you are familiar with these two locations and the people that elect to live in each area, you can appreciate how ambitious this task was and how unlikely it was to be successful.
Since the BHP-Billiton proposal to acquire Potash Corporation was turned down by the Canadian Government in 2010, there has been an air of uncertainty regarding Canadian foreign takeover policy. On the one hand, the government of Canada has continued to indicate that foreign investment is welcomed, but on the other hand, no explanation was provided for the Potash Corporation decision and so buyers have been left guessing about unwritten takeover restrictions.