Areas where objectivity is normally compromised are revenue synergies, costs to capture and headcount-related synergies

7 steps to synergise M&A success

Mergers and acquisitions (M&As) always make big news, though not the demise of most of them. “Let’s face it: M&As don’t always work,” acknowledges Mr Rajesh Sennik, who leads Accenture’s Strategy Practice in India, based in Delhi. Numbers about M&As tell a dismal story. Approximately 60 per cent of all mergers fail to create shareholder value, and less than a third create value that is noticeably higher than the industry average returns, Mr Sennik informs. “But when M&As succeed, they can lay the foundation for a company to be the leader in its sector.”

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Growth is about new market opportunities

See acquisition as a growth platform

Indian firms tend to prefer organic growth when it comes to the Indian market, but have looked to acquisitions to enter international markets, observes Bala Chakravarthy, Shell Chair Professor of Sustainable Business Growth, IMD, Switzerland ( http://www.imd.ch/), and author Profit or growth? Why you don’t have to choose (Wharton). He cautions, however, that international acquisitions are expensive and can bring some nasty surprises.

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