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M&As: How to structure a successful acquisition

Recent peak years for the value of mergers and acquisitions have included 1999, which was surpassed in 2007, which was surpassed in 2015.  The author, a professor at the University of Toronto, states that the vast majority – from 70 percent to 90 percent – of acquisitions are failures.  He actually uses the term “abysmal failures.”  In order to make an acquisition more likely to succeed, Professor Martin maintains that the acquirer should analyze what it is that they have to bring to the entity being acquired.  These factors typically include:

  • Growth capital
  • Managerial oversight
  • Transfer of valuable skills
  • Sharing of valuable capabilities

Analysis of a potential acquisition through a GIVING lens – what can we give to the entity being acquired – is a strong strategic logic and more likely to determine value that can be derived from a deal.

Source: Martin, R.L. (2016, June). M&A: The one thing you need to get right. Harvard Business Review, 94(6), 43-48.  Click here: https://hbr.org/2016/06/ma-the-one-thing-you-need-to-get-right Posted by AHA Resource Center (312) 422-2050, rc@aha.org




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