If between 70% and 90% of all deals are considered
failures, then why aren't we changing the way we do
deals?
Deal failure can happen in a variety of different ways, whether
it's a drop in shareholder value, forced divestment, or entire
management team implosions; however they end up, mergers and
acquisitions have a notoriously low success rate.
The question that interests us is why - and what can we do to
fix it. Here's what we think.
- Purpose: While companies turn to M&A for
many reasons (none of which is right or wrong), the
counterparties' respective purposes for the deal should align.
Conflicting purposes typically result in an imbalance of
expectations, which ultimately results in one party feeling like
they 'won' and the other feeling like they made a
mistake.
