More Engaged Shareholders Bring Challenges To Strategic M&A

Investors are more engaged and less deferential to boards and management teams—a trend that is increasingly being felt in M&A. Companies considering strategic transactions have to be aware of the risks of dealing with investors who are critically evaluating strategies developed by management, in some cases going as far as proposing their own competing strategies. This dynamic is creating challenges for companies in pursuing strategic transactions.

Laying the Groundwork

Recognizing that investor support is fundamental to successful M&A execution, management teams are more proactively disclosing to investors the role they see for M&A in their overall strategy, sometimes being fairly specific about sectors, geography or specific assets. Boards are increasingly pressing management teams to bring their analyses of potential opportunities to the board so that they can be more engaged in this element of the company's strategy. Boards are also showing more