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New global study by Eversheds reveals that deal due diligence does not focus enough on post deal integration
Little or no focus beyond the deal transaction to post-integration is compromising the benefits and value of cross-border M&A
Internal processes are as much to blame as external factors
Global businesses are not realising the full potential of cross-border mergers and acquisitions (M&A) as a means of driving growth due to weaknesses in the deal process. A new global study,
The M&A Blueprint: Inception to Integration, published today by global law firm Eversheds, shows that deal teams need a more holistic approach and stronger connections between the planning, completion and post-deal integration phases.
http://photos.prnewswire.com/prnh/20121015/567786-a ) (Photo:
http://photos.prnewswire.com/prnh/20121015/567786-b ) The study involved more than 400 multi-national businesses* who have worked on cross-border M&A deals in the past three years. It shows that nearly half (43%) of businesses believe that the most common cause for deals not successfully achieving their goals is due to a failure to address post deal integration from the early stages of deal due diligence.
The report also shows that legal risk is an increasingly important consideration in the assessment of potential deals. General Counsel provide essential input at this stage and more than half (59%) of all respondents said they had spotted potentially damaging issues early enough to caution management about proceeding with the deal.
The research highlights that less experienced buyers are finding the process challenging but even those with a wealth of knowledge believe that there are improvements to be made.
Robin Johnson, M&A partner at Eversheds, said:
"The current economic climate has made the business of doing deals much tougher, with the research highlighting an acute awareness of risk in the process. However, company boards are under pressure to secure growth and M&A is an essential business tool for achieving this, in particular for organisations thinking about tapping into or increasing their penetration in new international markets.