More than 90% of mergers and acquisitions fail to meet their expectations because of differing corporate cultures and structures, and because companies are prioritising financial and systems due diligence at the expense of intangibles, according to Hay Group.
Hay Group found that just 9% of mergers
are considered completely successful, with the figure dropping to 3% of mergers
and acquisitions carried out by UK companies.
The research into more than 200 European deals completed over the past three
years, found that omissions in companies’ due diligence procedures and
post-merger integration strategies were the main causes for failure. Companies
are prioritising financial and systems due diligence at the expense of business
culture, company structure and corporate governance.
Of senior business leaders questioned, 93% said traditional due diligence was
the priority, with 55% focusing on IT systems integration. However, 70% believe
that it is too difficult to obtain intelligence of corporate culture.
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