KPMGM&A - UNLOCKING SHAREHOLDER VALUE THE KEYS TO...

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Unformatted text preview: UNLOCKING SHAREHOLDER VALUE: THE KEYS TO SUCCESS MERGERS & ACQUISITIONS A GLOBAL RESEARCH REPORT page Foreword 1 Executive summary 1 2 Approach 5 3 Unlocking shareholder value 7 4 The six keys to success 9 Focusing on the hard keys 10 Focusing on the soft keys 15 Achieving the result: ‘hard’ keys with ‘soft‘ keys 18 5 The impact of cross-border deals 19 6 Conclusion 21 foreword contents This report presents the findings of KPMG’s most recent survey into the issues surrounding M&A integration. The survey sets out to be different. Rather than looking predictably at the reasons for failure, it emphasises what successful companies are doing right to unlock value from their deals. We focused our sample on the largest cross-border deals completed between 1996 and 1998 so the results capture the experiences of leading blue chip companies. Our innovative approach means that for the first time we have gone beyond respondents’ subjective assessment of performance and have applied an objective measure of deal success, based on shareholder value, to arrive at the ‘keys to success’. The results highlight the importance of an integrated approach to the pre-deal period. They also stress the challenge acquirers face in addressing the ‘softer’ people and cultural aspects of the deal, and in delivering an effective communications plan. As ever, it is the delicate balance between financial drivers and people aspects which underpins success. Neither is sufficient in itself to deliver the benefits. Finally, our high profile international sample gives us unique insight into the features of cross-border transactions. We have a new perspective on the cultural challenges faced by acquirers and can compare success rates between US, UK and European based deals. We commend this document to all those embarking on a major merger or acquisition. Our results indicate that acquirers remain over-optimistic about their performance and many still fail to deliver enhanced shareholder value through their acquisitions. Although each deal is different, much benefit can be gained by learning from the experience of others. John Kelly , Partner Colin Cook , Partner Don Spitzer , Partner Merger and Acquisition Integration Transaction Services Transaction Services Europe Global 1.3 1.2 1.1 Mergers and Acquisitions: Global Research Report 1999 1 Executive summary 1 Survey Objectives This research report sets out to be original. Too many surveys in the past have concentrated on what is going wrong with mergers and acquisitions. We focus instead on understanding what, in their most recent deals, major international companies are getting right in the hope that their experience will provide a useful guide to companies entering into their own deals in the future and that we have the most up-to-date view on this burgeoning market....
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KPMGM&A - UNLOCKING SHAREHOLDER VALUE THE KEYS TO...

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