M&A lessons for boards
I just finished reading a superb new book on value based management called "Questions on Value". One of the 11 papers in the book I liked most is about "Achieving valuable growth through M&A - Boardroom lessons for the acquisition game".
This article is a contribution of Mark L. Sirowe, Global Leader of the Mergers and Acquisitions practice of Boston Consulting Group and Professor at Stern University (New York).
It shows Mr. Sirowe is both a seasoned M&A consultant and an excellent lecturer. The article reads indeed like very good lessons at boardroom level on:
- how companies can establish strategic M&A processes and become an "always on company" as Sirowe calls it, and
- what boardrooms should go through on proposed deals.
To give you just a taste of the article, as a final M&A racing diagnostic Sirowe recommends boards to ask/think over the folowing questions:
- Is there evidence this deal emerged from a clear strategic perspective?
- How is this deal consistent with our long-term objectives for customers, markets and products/technologies?
- What are then stand-alone expectations of acquirer and target?
- Where will performance gains emerge as a result of the merger?
- Are the projected performance gains in line with the premium being paid?
- Which competitors are likely to be affected by the deal and how will they respond?
- What are the milestones in a 12-24 month implementation plan?
- What added investments will be required to support the plan?
- Who are the key managers responsible for implementing the plan?
- Which pieces of either company are good candidates for sell-off or split-off?
- Why is this deal better than alternative investments?
Kudos to Mr. Sirowe for this article.