Corporations continue to merge, divide, spin and acquire at record pace: 2016 saw more M&A deals globally than at any previous time since the 1980’s, just eclipsing the pre-financial crisis record high in 2007.
There have been recent headline-grabbing failures, but deals that don’t make it to the altar are exceptions. Most transactions are approved by shareholders and regulators. However, an approved transaction isn’t necessarily a successful one. In his 2016 letter to Berkshire Hathaway shareholders, Warren Buffett wrote “As is the case in marriage, business acquisitions often deliver surprises after the “I do’s.” How true. According to KPMG, 4 out of 5 M&A deals fail to deliver promised shareholder value.