According to a Harvard Business Review article, The New M&A Playbook, multiple studies put the failure rate for mergers and acquisitions between 70 and 90 percent. The vast majority of these deals fail, and yet companies continue to spend more than $2 trillion on acquisitions every year. Hope apparently springs eternal.
Some deals are pursued for the wrong reasons, and others are followed by poor execution. Even beyond that, the financial results are often disappointing. The authors of the article point to expectations that mergers will lead to cost savings – a benefit that rarely materializes. At the end of the day, the outcome is often a poorly integrated organization with few efficiencies and less new value.
There has to be something companies can do to prevent these costly mistakes – and it may just involve the role that procurement plays.
On August 23rd, Art of Procurement will be joined by Chris McCarney, Partner and Consultant, and Marcos Cortes, Managing Director, at KPMG. They will share their expertise and answer live audience questions about how procurement can improve the effective ROI of mergers and divestments and even speed time to value.
Of particular interest is how they plan to break down procurement’s role within the timeline of the deal cycle, pointing out what procurement can and should (or should not) do at each stage.
If there is a chance that your company will make an acquisition, be acquired, or spin off one or more business units, this is an event you won’t want to miss.