• Service: Advisory
  • Industry: Global China Practice
  • Type: Business and industry issue
  • Date: 12/7/2009

The Determinants of M&A Success 

The challenging deal environment of 2009 has made it more important than ever for companies to examine the factors that are correlated with deal success. The study is based on an analysis of 460 worldwide corporate deals that were announced between 2002 and 2006.

The Determinants of M&A Success
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Key Findings:


Based on our analysis of normalized returns and the variables examined, we found:

Cash-only deals had higher returns than stock-and-cash deals, and stock-only deals
Acquirers with lower P/E ratios completed more successful deals
The number of prior deals pursued by an acquirer was relevant; those who closed three to five deals were the most successful
Transactions that were motivated by increasing "financial strength" were most successful
Deals that were motivated by a desire to purchase IP or technology and those motivated by a desire to increase revenues were least successful
The size of the acquirer (based on market capitalization) was not statistically significant

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