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“The Synergy Solution – How Companies Win the Mergers & Acquisitions Game” by Mark L. Sirower & Jeffery M. Weirens – A Harvard Business Review Press Book Essentials

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“The Synergy Solution”  addresses a thorny business problem: why—and how—business leaders need to rethink and reshape M&A deals to improve their success rate. It has become common knowledge along the years that most of the mergers & acquisitions transactions fail. A study from PricewaterhouseCoopers even put a price tag on the failure rate – around 80%. It is a dismal result, given especially the amount of efforts and money poured by organizations in the process.

The M&A process stands at the apex of the corporate restructuring. There are so many uncertainties and so many synergy promises, that one cannot find another more risky process in the companies’ operating handbooks. If well-implemented, M&A’s can propel the involved organizations to a whole new market level. They can lower the costs per product, expand customer satisfaction and bring new products to new markets.

 

Unfortunately, the risks are equally high. Wrong M&As can waste 10-30% of a company’s resources without bringing any return on investment. They can destroy good products and executive careers. Shareholders can walk-out, together with other stakeholders. And the list goes on and on…

So what is the solution? The two Deloitte authors have between them decades of experience in the M&A arena. Their recommendations are pretty straightforward and should increase the chances of success of most deals.

Without spoiling the book (which I recommend you to buy), Mark L. Sirower & Jeffery M. Weirens make several sensible recommendations for the whole M&A process:

  • Plan carefully and leave little room for surprises
  • Keep your stakeholders closer than your enemies
  • Communicate again and again, then repeat
  • Look at the M&A deal after conclusion – through the eyes of the market
  • Stay lean and resist the temptation to overdo any of the M&A phases

Many of these recommendations from “The Synergy Solution” seem to be straight out of an operations playbook – and probably they were inspired from there. Yet, it is always tempting to skip some of the steps – especially when the pressure is so high, as it is often the case within a tough-deadline acquisition process. The executive Boards must show particularly sensitivity towards those performing the due diligence, as well as to their organizations. All come under a tremendous stress, which risks unexpected outcomes: postponed innovation, leaving talented employees…

 

“The Synergy Solution” has probably put the authors at hard work. As a result, the book covers many practical aspects of the M&A deals:

 

  • How to develop an M&A strategy and a pipeline of deals
  • How to test the investment thesis of a deal
  • How to decide what premium to pay
  • How to plan for a successful announcement day
  • How to properly communicate performance promises to stakeholders and shareholders
  • How to realize those promised synergies through integration planning and post-close execution
  • How to build a new combined organization
  • How to anticipate the questions of an informed board

 

 

Title: “The Synergy Solution – How Companies Win the Mergers & Acquisitions Game”

Authors: Mark L. Sirower & Jeffery M. Weirens

Publisher: Harvard Business Review Press

Publishing Date: March 15, 2022

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