Gobal Mergers
GLOBAL MERGERS & ACQUISITIONS
Mergers and Acquisitions (M & A) describes a business transaction that joins organisations together or splits them apart, triggering major changes for employees of participating companies. Such transactions include mergers, acquisitions, spin-offs, divestitures or partial disposals, joint ventures, private equity deals, management buy-outs and buy-ins, and IPOs. Merger also consults on the people implications of transactions for distressed and bankrupt companies and the companies that acquire them.
Economic pressures developed within the framework of a global marketplace have led to unprecedented numbers of mergers and acquisitions over the past decade.
The number of mergers and acquisitions involving US companies alone in 2004 reached 376 with an aggregate total paid of US$22.64 billion. In comparison, in 2003, the total amount paid was US$12.92 billion.
However, statistics show that the failure rate of most mergers and acquisitions lies somewhere between 40-80%. If one were to define 'failure' as failure to increase shareholder value then statistics show these to be at the higher end of the scale at 83%. The facts highlight a worryingly poor success rate for international mergers and acquisitions due to various factors.
Many business commentators are now acknowledging that failure does not have its roots simply in financial, monetary and legal issues but in lack of intercultural synergy. Research suggests that up to 65% of failed mergers and acquisitions are due to 'people issues', i.e. intercultural differences causing communication breakdowns that result in poor productivity.
A recent example of such intercultural failure has been that of DaimlerChrysler. Both sides in the partnership set out to show that intercultural hurdles would and could be overcome in their global merger. Recent articles in the Wall Street Journal and Business Week suggest however that DaimlerChrysler underestimated the influence of
Mergers and Acquisitions (M & A) describes a business transaction that joins organisations together or splits them apart, triggering major changes for employees of participating companies. Such transactions include mergers, acquisitions, spin-offs, divestitures or partial disposals, joint ventures, private equity deals, management buy-outs and buy-ins, and IPOs. Merger also consults on the people implications of transactions for distressed and bankrupt companies and the companies that acquire them.
Economic pressures developed within the framework of a global marketplace have led to unprecedented numbers of mergers and acquisitions over the past decade.
The number of mergers and acquisitions involving US companies alone in 2004 reached 376 with an aggregate total paid of US$22.64 billion. In comparison, in 2003, the total amount paid was US$12.92 billion.
However, statistics show that the failure rate of most mergers and acquisitions lies somewhere between 40-80%. If one were to define 'failure' as failure to increase shareholder value then statistics show these to be at the higher end of the scale at 83%. The facts highlight a worryingly poor success rate for international mergers and acquisitions due to various factors.
Many business commentators are now acknowledging that failure does not have its roots simply in financial, monetary and legal issues but in lack of intercultural synergy. Research suggests that up to 65% of failed mergers and acquisitions are due to 'people issues', i.e. intercultural differences causing communication breakdowns that result in poor productivity.
A recent example of such intercultural failure has been that of DaimlerChrysler. Both sides in the partnership set out to show that intercultural hurdles would and could be overcome in their global merger. Recent articles in the Wall Street Journal and Business Week suggest however that DaimlerChrysler underestimated the influence of