The myth that 75% of all mergers fail has long been dispelled. It was based on a statistic related to announcement day effect that failed to capture the reality of corporate value creation. M&A does boost companies’ growth and value, our new research shows, but the bet-the-company deal isn’t the route to success. Indeed, infrequent large deals do tend to hurt value creation. Instead, it is a steady stream of transactions — known as programmatic M&A — that delivers the real wins. But these transactions need to reach particular thresholds of frequency and cumulative value to make a real impact.
Research Shows That Smaller M&A Deals Work Out Better
The bet-the-company deal isn’t the route to success.
May 09, 2018
Summary.
The myth that 75% of all mergers fail has long been dispelled. It was based on a statistic related to announcement day effect that failed to capture the reality of corporate value creation. Research shows that M&A does work to boost companies’ growth and value, but the bet-the-company deal isn’t the route to success. Indeed, infrequent large deals do tend to hurt value creation. Instead, it is a steady stream of transactions — known as programmatic M&A — that delivers the real wins. But these transactions need to reach particular thresholds of frequency and cumulative value to make a real impact.
New!
HBR Learning
Change Management Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Change Management. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Change may be the only constant in today's organizations. Here's how to lead through it.
Learn More & See All Courses
New!
HBR Learning
Change Management Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Change Management. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Change may be the only constant in today's organizations. Here's how to lead through it.