In the age of Amazon, companies need to be intelligent, agile, automated and on the cloud. They need to be leveraging new technologies and different cultures and embracing risk to deliver mass personalization and exponential value for competitive sustainability.
But building this kind of operation isn’t easy, and mergers, acquisitions and divestitures (MA&D) are increasingly becoming a strategic tool of choice for companies to buy their way into the model, regardless of industry.
In fact, in a June 2018 survey of nearly 300 U.S.-based CEOs1, three quarters said that they are considering MA&D within the next three years, and that the main drivers to doing so are to acquire new products, services, or business capabilities and to enter new markets/industries or create new business models.
After achieving near-record highs of M&A activity over the past five years, experts say that the fear of technological disruptions will be driving a similar scenario in the years ahead. CEOs are on the prowl for opportunities to disrupt before being disrupted — a strategy that particularly resonates with middle-market companies.
But it isn’t just about opening new horizons. MA&D is often a matter of survival, and whether or not the transaction will produce the desired outcome, CEOs tell us, depends a great deal on early preparation and deliberate orchestration across the transaction’s lifecycle.
Understanding the challenges and how to meet them is key to avoiding common pitfalls, as is starting with the end in mind during due diligence.
We invite you to consult the full report to hear other CEOs’ views on the greatest benefits of an MA&D strategy, as well as what they perceive to be the main challenges and considerations for success.
____
1 A June 2018 Chief Executive Group / Tata Consultancy Services Survey