A key strategy for value creation | Mergers and Acquisitions

Despite the backdrop of market volatility driven by the COVID-19 pandemic, geopolitical unrest, and technological acceleration, mergers and acquisitions deal volumes have remained robust during the past three years, building on the momentum observed since the 2019 survey.

The 2023 M&A Integration Survey conducted by PwC offers crucial insights into the current state of the mergers and acquisitions landscape. Nevertheless, successful integration of acquisitions remains a persistent challenge for companies across the board, with room for improvement evident even among the most accomplished acquirers.

Here are the ten key findings from the survey, along with recommendations tailored to M&A professionals:

1. Resurgence of Transformational Deals: The survey reveals a resurgence in transformational deals, characterized by transactions exceeding $5 billion in value. After a dip in 2020, such deals significantly increased in 2021 and 2022, accounting for nearly half of all deals surveyed.

While M&A remains a key strategy for value creation and business transformation, the survey underscores the need for comprehensive integration planning, talent retention strategies, effective change management, and technology adoption.

2. Elusive Comprehensive M&A Integration: Only one-third of surveyed companies reported achieving successful integration across all facets of their acquisitions, encompassing aspects like people, culture, technology, and operations. For the majority, there's room for improvement in various areas of integration.

3. Experience Matters: Companies with more extensive M&A experience displayed higher success rates in integration. Notably, 70% of firms with over ten M&A deals completed in the past five years reported successful integration across all aspects, compared to 40% for those with fewer than five deals in the same timeframe.

4. Increased Investment in M&A Integration: Recognizing the pivotal role of integration, companies are allocating more time, effort, and capital toward this phase. For instance, 78% of surveyed firms allocated 6% or more of the deal's value to integration, a notable increase from the 2019 survey's figure of 56%.

5. Importance of Value Creation Plans: Firms with a well-defined value creation plan for their acquisitions tend to be more successful in integration. This plan should encompass specific objectives, a clear timeline, and address areas like revenue growth, cost savings, and market share expansion.

6. Focus on Go-to-Market Goals and Revenue Synergies: Achieving go-to-market goals and revenue synergies has gained prominence. In the 2023 survey, 75% of companies prioritized go-to-market goals in their integration plans, while 72% emphasized revenue synergies.

Read the final four findings and conclusion at M&A: A key strategy for value creation | LinkedIn.