Despite geopolitical fears and the spectre of a global economic slowdown organisations are continuing to look to M&A to achieve growth. According to the Global Capital Confidence Barometer as we move into a new decade 52 per cent of organisations are planning to actively pursue M&A over the next 12 months. In particular tech, B2B and luxury have all been earmarked as sectors with over average potential for activity.
However, the stats show that between 50 and 85 per cent of the deals will fail. With the average transaction value set at around $52 million; the stakes are high. However, for the 15-50 per cent of M&A deals that are successful the rewards far outweigh the risk.
Cultural difference is the most vaunted reason for a failed merger. The dissonance between two organisations can be extremely divisive and the inability to align them from the offset can quickly and easily set in the rot which eventually turns gangrenous and ultimately becomes terminal. Even the most seemingly trivial of differences can be a powerful indicator that all is not right with a deal.