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Here’s how Millennials are Influencing M&A Target Choices

The predilections of America's youth are swaying companies' selection of corporate acquisition targets.

The predilections of America’s youth aren’t just changing the way senior executives think about marketing products or hiring the odd employee. They are also swaying their selection of entire corporate acquisition targets.

Whether faddish conjecture or solid fact, many commentators still insist that today’s youth are different from the youth of past generations, partly as a result of technological innovation. The theory then goes that millennials will hold onto these personal preferences even as they age, potentially rendering some M&A targets unwise due to their particular product suite or workplace culture.

“Close to three quarters (74%) of 89 senior executives recently surveyed by consultancy EY said that they took millennial attitudes and preferences into consideration in M&A decision making.

The list of apparent millennial idiosyncrasies is long: they are considered to be more open to flexible employment arrangements, such as working remotely or in short bursts, and more likely to value “a sense of purpose” above product prices or their pay. Studies also have suggested they’re less responsive to authoritarian management structures and styles and don’t much like open-plan offices, among other conclusions.

Company leaders appear to be taking many of these descriptions seriously—even seriously enough to change their M&A strategy.

For instance, when Unilever acquired eco-conscious cleaning products company Seventh Generation in September, it noted that the target was a purpose-driven brand. “This addition to Unilever’s product portfolio will help us meet rising demand for high-quality products with a purpose,” Nitin Paranjpe, the head of the company’s home care division, said.

Indeed, close to three quarters (74%) of 89 senior executives recently surveyed by consultancy EY said that they took millennial attitudes and preferences into consideration in M&A decision making. Around a quarter (26%) said it was a factor all the time, while around half (48%) said it was considered some of the time.

“The unique impact of millennials is increasingly top of mind for executives looking to grow and future proof their businesses, both organically and inorganically through strategic transactions,” said EY’s Bill Casey. “If we conducted the same survey one year from today, we expect the results would reflect this to an even greater extent.”

The top consideration mentioned in the survey was the “purpose-driven” mindsets of younger people, with 75% of respondents saying this could change the types of deals that their company pursued. Deals in the tech sector were predicted to be the most heavily influenced by millennials, followed by the consumer goods, media and telecom, food and beverage and automotive sectors, respectively.

“What’s also interesting is the dual influence of the millennial generation on business—both as a growing consumer population with palpable buying power and as rising managers who will continue to bring new philosophies, strategies and mindsets to the C-suite,” Casey said.


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