Navigating complex mergers and acquisitions

Business has become more complex, and so have mergers and acquisitions (M&A).

Across the world, traditional markets and business models have been disrupted, operating models upended and customer behaviour continues to shift. Increasingly, deals are aimed at ambitious strategic goals that take companies to a new frontier through the transformation of operating models or acquisition of digital capabilities.

Not only has the nature of deals changed but so has the deal market. The market has become intensely competitive, M&A valuations continue to rise and the pool of attractive targets is shrinking in some industries.

The ultimate payoff from complex deals is often strategic value — new opportunities or new ways of doing business that build long-term value. These deals transcend traditional synergies. The strategic goals of the transaction, therefore, must be clearly defined, widely supported and pursued methodically and relentlessly.

Diligence should not be a “check in the box” exercise to validate baseline assumptions. It’s your opportunity to identify even greater sources of value and explore the art of what is possible with target management. It is also an opportunity to ensure your own organisation is clearly aligned around key levers of value.

Complex deals demand a different approach to Day 1-readiness — one with greater purpose, intensity and speed. Sophisticated buyers use the sign-to-close window to protect business momentum, find and mitigate blind spots, continue to seek even higher synergy upside and accelerate tailored integration planning.

More than ever, the value of a target lies in the capabilities, energy and culture of its people. Tight and evolving labour markets raise the risk of losing talent — and reduce the likelihood of quickly finding replacements. To make complex deals work, you need a people strategy git for today’s talent realities.

Buyers define synergy targets at the outset, but they shouldn’t stop there. Be alert to new opportunities that arise and prepare to flex as markets, leadership and strategies evolve.