The Value Killers: How Mergers and Acquisitions Cost Companies Billions—And How to Prevent It

Description

In a business climate marked by escalating global competition and industry disruption, successful mergers and acquisitions are increasingly vital to the growth and profitability of many corporations. If history is any guide, 60 to 70 per cent of new mergers will fail – and will destroy shareholder value. To date, analyses of the M&A failure rate tend to focus on individual causes – e.g., culture clashes, valuation methods, or CEO overconfidence – rather than examining the problem holistically. The Value Killers is the first book based on a holistic analysis of successful and unsuccessful transactions. Based on research, interviews with top executives, and case studies, this book identifies the key causes of failures and successes and offers prescriptions to increase the odds that future transactions will deliver all the anticipated synergies. The Value Killers offers practical advice in the form of 5 Golden Rules. These rules will help managers and boards to ensure that target companies are properly valued; potential synergies and risks are identified in advance; checks and balances are installed to make sure that the pros and cons of the transaction are rationally and objectively evaluated; mechanisms are created that will trigger termination of bad deals; and obstacles to successful post-merger integrations are assessed (and solutions developed) before the deal closes. Each chapter includes questions for executives considering future M&As to allow them to see whether they are on the right track or not. Front Matter ....Pages i-xviii Don’t Rely on Investment Banks for Valuation (Nuno Fernandes)....Pages 1-14 Avoid “Strategic” Deals (Nuno Fernandes)....Pages 15-30 Link the Before and After (Nuno Fernandes)....Pages 31-49 Think Like a Financial Investor (Nuno Fernandes)....Pages 51-70 Move Fast and Communicate Transparently (Nuno Fernandes)....Pages 71-78 Conclusion: Closing the Deal, But at What Price? (Nuno Fernandes)....Pages 79-83 Back Matter ....Pages 85-88