Decades of statistics show that only around 60% of M&As actually provide greater value for the firms involved, according to David Olsson
Talking at a CIPS Fellows event, Olsson, who is associate partner at consultants BTD, explained how leadership, experienced people and best practice are critical.
“M&A success is based on leadership behaviour, from strategy to successful realisation of the deal benefits,” Olsson said. “Integration is not a tick-box exercise because every deal is different.”
It is crucial to understand the deal before signing, “stand in the future” and calculate the value it can bring. “Then you would be paying the right price.
“It doesn’t happen 40% of the time. You have decades of people doing intelligent work, but still it would seem as if there is a ruinous effect on businesses if they choose to grow through M&A.”
The onus is on firms to assess any human-rights impacts on the supply chains, warned Stuart Neely, a senior associate and member of the Business Ethics & Anti-Corruption Group at law firm Norton Rose Fulbright.
“If you come across a target company and they don’t have an understanding of what their risks are, there might be a lot of latent risks there,” he warned.
Neely also said firms should not just rely on contract terms to ensure human-rights breaches did not take place, but should also work actively with suppliers to tackle issues.