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Mergers and Acquisitions Boom Seems to Have Legs
2015 was a banner year with “…household names such as Kraft, Dell and Anheuser helping to drive global merger and acquisition (M&A) activity to new heights” (according to a Forbes online article
); Manufacturing giants Dow Chemical and DuPont merged with cost synergies predicted to exceed $3 billion (according to a Reuters.com online article
); and the news is reporting entertainment companies Viacom and CBS are once again in talks to “recombine”.
I could go on.
Fueled by uncertainty in the global economy, these corporations are merging to increase revenue and improve the bottom line. While those are powerful business drivers associated with virtually any merger, it’s important to remember M&As are incredibly challenging and have a failure rate somewhere between 70-90% (according to a 2015 Business Review online article). This risk makes a seamless corporate integration imperative to any M&As success.
Corporations in the process of a merger or acquisition are faced with several challenges; understanding and creating transparency of their actual global occupancy costs; integrating and streamlining business processes; optimizing their portfolio and location strategy to align with larger corporate objectives; realizing their financial synergies; and completing the entire transformation in a compressed timeframe.
Our GCS M&A consulting teams have found that a comprehensive and cross-functional approach combined with the deployment of rapid M&A specific technology (with advanced integration analytics) is the best way to ensure that the merged corporation will not only achieve its financial targets but have a clear strategy, effective communication, employee engagement and comprehensive process adoption.
There’s little argument today’s tumultuous market conditions have created a climate conducive to the recent boom in mergers and acquisitions and currently this trend isn’t slowing down. In fact, Forbes stated “…last year’s surge of mega-deals may have the potential to drive even greater deal activity this year.”
Well, we’re halfway through 2016 and I’m starting to think they might be right… at least for now.