As per Harvard Business Review Articles, The Big Idea: The New M&A Playbook and M&A: The One Thing You Need to Get Right, - "M&A is a mug's game: Typically 70% - 90% of acquisitions are abysmal failures". You have been tasked by the Board of Directors of Commerce Bank (Regional Bank located in NJ, NY, PA) to explore expansion opportunities in Florida via an acquisition. Commerce's mission is to be America's Most Convenient Bank. The CEO of Commerce has already found a target Bank in Florida, about ½ the size of Commerce, as a candidate for acquisition and wants to proceed.
The Board is asking you to lead the Due Diligence Team to answer the following questions knowing that 70% to 90% of acquisitions do not meet their intended goals.
- What are we acquiring?
- Will this acquisition boost current performance?
- Will this acquisition lower or increase costs?
- What is the right price to pay?
- How would you avoid integration mistakes?
- What other qualitative and quantitative information would you need to make your recommendation?
- How would you present this information to the Board?
Please reference both articles as you perform your analysis.