What are the top 10 issues in M&A transactions in present day?

This topic contains 14 replies, has 14 voices, and was last updated by  David Castell 2 months, 2 weeks ago.

Viewing 15 posts - 1 through 15 (of 15 total)
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  • #117047

    Hannah Barber
    Participant

    What are the top 10 issues in M&A transactions in present day?

    #117649

    Kevin Ng
    Participant

    1. Covid has made it harder in my opinion to close on cross border deals as it is very unproductive to travel to the target’s country for due diligence and negotiations. Negotiations over zoom are no replacement for face to face negotiations

    #117654

    Leslie Tan
    Participant

    Information overload, with raise in getting information being readily available online compared to the days of past, the ability to filter right information for analysis is tricky.

    #118173

    William Yong
    Participant

    Creating value for the acquiring company especially when we tend to over-value

    #118233


    Participant

    Lack of proper Intellectual Property assessment and audit by the acquirer on the acquiree.

    #118243


    Participant

    Undervaluing the importance of culture match and the lack of linkage between deal parameters/decisions/objectives and the integration planning.

    #118416


    Participant

    Lack of sustained interactions between the deal team, deal decisions and integration phase. This leads to less than optimal decisions and puts synergies at greater risk of being realized.

    #118420

    Linda Castle
    Participant

    Uncertainty in times of pandemic (when will it really end?) and lost value during restriction times.

    #118448

    Terry Koh
    Participant

    It would be performing due diligence in cross border transactions, being able to see the actual business in real life rather than over zoom.

    #118535

    Christian Münnich
    Participant

    Cultural differences

    #119067

    Failure of effective human capital due diligence – among the top 5 if not the #1 reason for deal failure in the 1-3 year period post-transaction close. Of course, Human Capital Due Diligence has numerous steps and components, any one or combination can be a cause, so likely more than one of the top 5 and absolutely more than 2 of the top 10 issues are directly attributable to Human Capital Due Diligence.

    #119248

    William Venus
    Participant

    Overestimating deal synergies has to be among one of the biggest issues in today’s market. With capital at cheap rates and COVID driving innovation, small companies can command a premium on based on prior deal multiples of similar companies.

    #119670

    Matthias Arnet
    Participant

    Very interesting inputs. For me, the mentioned over estimation of synergies is one of the biggest issues, driving prices/premium.

    #119686

    Sean Casault
    Participant

    I think it’s been aptly pointed out already, but I would echo a couple of points:
    1) over estimation of available and expected synergies
    2) Erosion of value and value creation due to cultural differences
    3) Poor due diligence, particularly in the human capital components

    #119730

    David Castell
    Participant

    In the automotive sector I would add, not clearly knowing where the market is moving, which technologies will be applied, etc. are slowing down certain M&A decisions.

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