Why do about 70-90% of M&A deals not create value for shareholders and therefore fail? / Adrien DUVERGER / 2021

Titre : Why do about 70-90% of M&A deals not create value for shareholders and therefore fail? Type de document : Mémoire Auteurs : Adrien DUVERGER, Auteur Année de publication : 2021 Importance : 34 p. Note générale : Pour accéder aux fichiers PDF, merci de vous identifier sur le catalogue avec votre compte Office 365 via le bouton CONNEXION en haut de page Langues : Anglais (eng) Mots-clés : Management ACTIONNAIRE ; FUSION ACQUISITION ; RISQUE Entreprise SYNERGIE Résumé : This Dissertation aims to understand why over 70-90% of M&A deals do not create value for shareholders and therefore fail. To be able to understand this issue and find possible operational recommendations, it is first important to understand the main reasons for M&A failures and how they affect and destroy shareholder value. Those reasons can be put into three categories, the ones linked to management, the ones linked poor integration and the ones linked to external factors. These reasons show that there are a lot of pitfalls for M&A transactions which explain the very high failure rate. Despite such a high failure rate, the number and value of deals has been trending up for the past 30-40 years. For this reason, this paper also goes in more depth on why there are still so many M&A deals despite the high failure rate. And, both shareholders and executives have a role to explain this situation.Indeed, they tend to favour external growth over organic growth, but other reasons include executives’ overconfidence in the deal and in their abilities to successfully integrate the target company. After having questioned and reviewed the reasons for deal failures and the number of deals, this paper aims to present operational recommendations for successful M&A deals. These recommendations include understanding the business model of the target, guidelines to create value and recommendations regarding the right price to pay and the various integration methods. Programme : MSc Finance, Investment & Wealth Management Permalink : https://cataloguelibrary.neoma-bs.fr/index.php?lvl=notice_display&id=538603