With the global liquidity crisis set to fuel new merger and acquisition (M&A) activity this year, a new report by global management consultancy Arthur D. Little claims that despite the growing experience with mergers over the last seven years, the failure rates stay at a high level. To avoid becoming another statistic, Arthur D. Little's "Winning the Merger Decathlon" outlines a 10 step approach companies can take to ensure a merger will boost productivity and profitability without bringing additional risk to existing business.
According to Arthur D. Little's latest report, the three major drivers to M&A that will continue fueling deal activity in 2009 are: continued corporate restructuring; industry consolidation in mature markets; and finally, a desire of established players to exploit growth opportunities in emerging markets.
In one of the M&A case studies detailed in this report, Casinos Austria, having gained a majority stake in Österreichische Lotterien (Austrian Lotteries) in late 2007, followed a clear strategy to simultaneously develop a single centrally-functioning headquarters while allowing the two companies' six customer-facing business units to continue operating independently. The project, entitled "Strong together!" ensured the headquarter restructuring yielded maximum cost-savings, while at the same time allowing the six independent business units to carry on with operations virtually unaffected.
Ten steps to success
Based on an analysis of corporate post-merger integration projects across industry, Arthur D. Little identified the 10 most important considerations managers must make to successfully move forward from a corporate merger. The Merger Decathlon follows:
- Follow a clear strategy
- Pick the right deal
- Leverage the pre-closing period
- Adapt integration approach and speed
- Take critical governance decisions upfront
- Invest your best resources
- Keep your eyes on the ball
- Capture synergies in the bottom line
- Address the cultural differences
Notes for EditorsAbout Arthur D. Little
Arthur D. Little (ADL), founded in 1886, is a leading global management consulting firm that links strategy, innovation and technology to master complex business challenges while delivering sustainable results to our clients. Arthur D. Little has a collaborative client engagement style, exceptional people and a firm-wide commitment to quality and integrity. ADL is proud to serve many of the Fortune 100 companies globally in addition to many other leading firms and public sector organizations.
Further InformationMichael G. Ungerath
Arthur D. Little
Tel: +49 211 86090
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Tel: +44 (0)208 971 6423/6421