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Successfully Executing After a Strategic Transaction

Heres what corporate treasury can do to navigate the risks and seize the opportunities inherent in a merger, acquisition, or divestiture.

By Eric Cohen and Chris Lee | Updated on September 26, 2013

The volume of strategic mergers, acquisitions, and divestitures occurring in the United States grew 25 percent in the first half of 2013. This trend shows no signs of abating as, according to PwC’s Annual Global CEO Survey, more than 40 percent of U.S. executives expect their company to pursue such a transaction over the next 12 months.

This increase in deal activity is occurring despite inconsistent evidence about the value of merger and acquisition (M&A) transactions—with some studies placing the failure rate at more than 60 percent. Companies sustain a high level of enthusiasm for M&A deals despite the known risks, largely because they focus on a deal’s synergies without adequately considering how they are going to identify, assess, and mitigate operational and organizational risks. In the recent PwC survey, executives planning to undertake a strategic transaction cited “creating and capitalizing on deal synergies” as the primary driver of their M&A aspirations.

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