Strategy

Valuing the urge to merge

M&A experts debate the merger boom.

Are mergers and acquisitions more trouble than they're worth? Confusion reigns, as two recent studies on M&A activity by global services firms show. A report by Towers Perrin indicates large companies involved in the current M&A cycle outperformed the market by 7%, on average. Yet a review of more than 400 execs by Accenture concludes such deals often come up short. What gives? We asked the experts.

PRO: Éric D'Amours

Principal and national M&A leader at Towers Perrin

The closing date is when the work begins, not when it ends. In order to realize synergies that have been identified in due diligence, companies are placing greater emphasis on integration, as well as on longer-term concerns such as cost volatility, the consequences of workforce demographic evolution and potential hurdles in culture compatibility between companies.

CON: Bill Morris

Country managing director for Accenture in Canada

IT integration is a critical problem in cross-border deals. A failure to identify and properly address IT-integration issues can potentially wipe out a deal's entire value, and yet many survey respondents concede they have yet to solve their IT issues. Only 30% [of those surveyed] pronounced the integration of IT a success for their most recent cross-border deal.