Mergers and Acquisitions in the Automotive Industry - Book Report/Review Example

Chapter 3 Review of Literature The first objective of Review of Literature is to scan the literature available on the subject of the dissertation and to observe whether there are any gaps in the extant literature - while in all humility conceding the limitations of space and time such an audacious move entails. The more important objectives of the Review of Literature are to find precedents that may be applied to the subject under discussion; to find theoretical precepts that coherently and satisfactorily analyse the subject that may be applied to the two organisations undertaking the merger process, formulating conclusions and suggest recommendations to make the processes work effectively. M & As in management literature: The study of literature on business strategy is replete with references to alliances, acquisitions, mergers and takeovers with its variations like hostile takeovers. The objective of all these processes is to create a larger and financially more powerful company (Campbell, Stonehouse and Houston 2004, p. 215). Even at the global level M &As have increased in number and scale phenomenally since the 1990s. Businesses use them to consolidate in their search for scale economies, e.g. BP-Amoco; to increase their global reach and competitiveness e.g. Daimler-Benz; acquire competencies, or new technologies e.g., Sony-Columbia (Lasserre 2003, p. 134) and convergence of services (AOL-Time Warner). In spite of increased M & A activity during the 1990s, there was some scepticism as to their success in achieving their intended purpose. It appears, Michael Porter argued that half of purchases benefited shareholders and the acquiring company in the long run Michael Traem of the consulting firm A.T. Kearney, deemed only 42% of mergers successful and Mark Sirower of the New York University estimated the success rate at just 35%. However the proponents of the M & As questioned the validity of these claims on the ground that the studies of the three researchers mentioned were not only dated - with Porter's studies based on the 1980s and the other two based on the early 1990s. Further they were based on just 200 M & As, too small a sample size. They argued that conditions had indeed changed since then which suggested a higher success rate but conceded that there was an amount of risk involved in the strategy. The risks involved in the strategy, according to Sirower, were that unlike other opportunities, M & As required an 'up front' commitment. For example a company developing a new product might decide to halt spending on it at any stage from R & D to marketing but in the case of acquisitions, "the cost of capital starts ticking right away". Again the proponents argued that the M & As of the past were different. The M & As of the 70s were conglomerization, those of the 80s were high-leverage, hostile takeovers known as bootstrap operations. On the other hand, the M & As of the 90s were fundamentally different with companies consolidating horizontally and geographically with enormous potential for synergies that drastically cut costs and overhead. It was in the ensuing debate that Sirower published his, by now famous "The Synergy Trap". He argued that studies showed that stock deal under-perform cash deals as this sends a signal to that value is being transferred from the acquiring shareholders to the acquired shareholders. He explains this with an example. If a company is valued at $ 50 million and the acquiring company projects a future valuation of $ 100 million the company may pay $ 80 million to acquire it. However, transferring stock amounts to paying an additional $ 20 million. This sounds similar to Koch's argument (2000, p. 101-103) to acquire an undervalued target but in reverse. Further, Sirower argues that in case of cash payments, the company budgets interest payments as a part of the integration process. Companies should be disciplined to hit the debt targets, in the case of stock transfer the discipline is abandoned. (See also the discussion about synergy below).Traem analysed the merger of 115 European, American and Asian mergers between 1995 and 1998 and proposed a seven point agenda for achieving success in M & As. This is similar to Koch's formula (2000, p. 101 - see below) with a few differences. Traem suggests that the acquiring company develop a clear vision, install a management team during the first 100 days, evaluate and achieve synergies and cost savings, identify where it can achieve early wins; that it implement risk management policies, merge corporate cultures, communicate the merger both in-house and outside. According to him that some of the criteria are "more and more the focus of managers" but insists that his agenda is all-or-none phenomenon; it is not sufficient to implement one or two of these criteria; companies should implement all of them to achieve success. (Kahn, 1999). It appears, on the face of it, that although there are sporadic references to mergers and acquisitions in the automobile industry, mergers in other industries like information technology, media, oil and gas, telecommunications and steel far outnumber references to mergers and acquisitions in the automobile industry. Even the cursory references to mergers and acquisitions in the automobile industry in management literature club the sector with industrial machinery and oil and gas. (Weston and Weaver, 2002, p. 9). A research paper published by Brakman, Steven, Garretsen, Harry and Van Marrewijk corroborates this observation. According to the sector-wise distribution of industries studied - based on the standard industrial classification (SIC) - between 1980 and 2005, the most active sectors were chemicals, electronics, industrial machinery, instruments and food where the sector described as transport figured low down. (2005, p. 12-13). The objective of the paper was to analyse global mergers and acquisitions during the period to confirm two hypotheses viz. that M & As "follow comparative advantage" and that they occur in "waves". The hypotheses were derived from the General Oligopolistic Equilibrium (GOLE) model ("that captures the strategic interaction between firms in a general setting") developed by Neary Peter (2003, 2004 cited in Brakman, Steven, Garretsen, Harry and Van Marrewijk, 2005, p. 1). Even a magazine dedicated to acquisitions mentions only a comparatively small deal amounting to $ 130 million, in which the US automotive parts manufacturer Eaton Corp acquired the electrical products division of the UK company Delta in 2002. (M & A Deal Data, 2003). The last big deal in the automobile industry was the $ 40 Billion Daimler-Chrysler merger reported by Angwin in 2001. But it is comparatively small when viewed in the backdrop of the other M & As in Europe published in the Journal of World Business. According to Angwin, KPMG reported that deals worth $ 643 billion took place in the first half of 2000 representing a 60% increase over the corresponding period of the previous year. Of these, the AOL - Time Warner merger ranked first at $ 399 billion (infotainment), followed by Vodaphone - Mannesman - $ 186 billion (telecommunications), Exxon - Mobil $86 billion (oil), Travelers - Citigroup - $73 billion (financial services) (Angwin, 2001). Marshall andHeffes (2007) report that the mixed record of mergers and acquisitions made organisations were veering towards strategic alliances. The authors base their article on the findings of a mail survey of 201 senior finance executives and in-depth interviews of CFOs and business development executives in more than 10 companies conducted by the Transaction Services group of PricewaterhouseCoopers. The executives polled believed that due diligence was required ever for alliances and some of them felt that an alliance was phase 1 of an M & A. (Marshall andHeffes, 2007). According to a news report The Financial Express filed from London on October 28 this year, Ford has put up two of its iconic British motorcar brands, Jaguar and Land Rover for sale. There are six suitors in line for the brands led by India's Tata group, which has earlier this year taken over the Anglo-Dutch steel maker Corus for $ 13 billion. The other important contender for the deal is One Equity, the private-equity arm of the American bank JP Morgan, led by Jac Nasser, the former chief executive of Ford. The bidders are interested in the new Jaguar XF, the model that will go on for sale in March as an important component of the deal. Analysts however, believe that the issue of future supply agreements as Ford supplies the engines for the two cars, and uncertainty of European Commission's plans to further limits carbon dioxide emissions have complicated the deals. The company, which has been struggling to return to profitability, has already sold Aston Martin earlier this year and is expected to sell the Swedish car group Volvo soon. (Tatas in bid to take over Jaguar, 2007) There are two possible reasons for this paucity of information about M & As in management literature. Firstly management researchers seem to be more concerned about the rationale, objectives, processes, synergies and outcomes of M & As, per se rather than their study in individual sectors. Secondly, there is perhaps less volatility - with regard to M & As - in the automobile industry than in other sectors, not least because of the nature of the industry and the turmoil some of the major players in the industry have been undergoing. If this indeed was the case then there is a strange paradox at work as one of the motivations for M & As is an undervalued target. Smith and Yang (1999) focused on the objectives and success rates of M & As, such as value creation, factors that induced or helped (deregulation, advances in technology etc.) or hindered (cultural factors, corporate culture, work rituals and leadership etc.) and the success rates in achieving of M & A objectives. The researchers estimated that the success rates of domestic M & As in the 1990s as 45% in the US, 49% in Europe and 62% in Canada. The success rate of European firms buying US companies was 67% but in the reverse direction, the success rate of US companies buying European firms was just 32%. (Smith and Yang, 1999). However this did not seem to deter US investors and by 2003 they seemed to be returning to Europe in droves. Citigroup's Global Corporate & Investment Bank claimed that seven of the top 10 M & A deals occurred in Europe, including in Germany, long considered Europe's sleepiest market. (Fairlamb and Reed, 2003). Maria, Lyckhult and Sabina Olsson (2006) observe that one of the main reasons for M & As to fail is cultural clashes between the merged entities especially in cross national settings and warn managements against attempting cultural assimilation of acquired organizations. (Maria, Lyckhult and Sabina Olsson, 2006). Beusch (2004, p. 50) recommends the Haspeslagh and Jemison (1991) framework for post-merger integration. He argued that the framework was applied in the automobile industry with successful outcomes. The framework combines the two dimensions of strategic interdependence and autonomy to create their well-known contingency matrix. The matrix suggests that there are four possible post-merger styles that can be used depending on the need to create value creation through sharing and transfer of resources ("strategic interdependence") and the need to maintain the independence of the acquired company. The four quadrants of the matrix based on low or high autonomy and low or high strategic interdependence are: Holding (low autonomy, low strategic importance); Absorption (low autonomy, high strategic importance); Preservation (high autonomy, low strategic importance) and Symbiotic (high autonomy, high strategic importance).When Volkswagen acquired the Czech auto company Skoda the company felt that there was high interdependence. Therefore the companies were consolidated and cultures and structures fully integrated. VW implemented both its organisational structures and its strategic vision into the acquired firm Skoda. Similarly, when the American carmaker GM acquired brands like SAAB, Opel, Subaru and Cadillac the preservation approach (low need for strategic interdependence and high autonomy) was applied. However GM is gradually moving towards the Symbiosis approach where there is high need for strategic interdependence and high need for autonomy. According to Haspeslagh and Jemison, the Symbiosis approach is highly complex and difficult to achieve. (Angwin and Arnott 2001, p. 14 and Beusch 2004, p.57) A research study published by Hagedoorn and Duysters (1999) supports the view that for 'medium-tech' industries mixed strategies were preferred over strongly M & A strategies. The Organisation for Economic Co-operation and Development (OECD) categorises industries into 'high-tech', 'medium-tech' and 'low-tech' depending on the "level of technological sophistication in terms of R&D intensity". The automotive industry with an R&D intensity of 3.4% falls under the medium-tech category. The objective of their study was, to study the conditions under which companies prefer strategic technology alliances or M & As "as alternative external source of innovative capabilities." The authors go on to explain concepts like strategic technology alliances, M & As, and innovative capabilities. However in all cases, environmental influences and company specific conditions determine the choice of strategies. (Hagedoorn and Duysters 1999). Factors influencing M & As: A research study published by the global strategy and technology and consulting firm, Booz Allen Hamilton indicates that the success rate of post-merger integration in M & As is about 50%. Koch (2000, p. 101) partially agrees with this view, as in the remaining 50%, in the aggregate, they do not harm them. According to the Booz Allen Hamilton study, the success of any M & A does not depend upon any specific aspects of the deal and makes some interesting observations: The success or failure of the M & A does not depend on the price paid, which means that it has no correlation with the premium paid. This means that neither does buying at a bargain price ensure success nor paying a premium over the odds make the deal a failure. The size of the deal does not really matter. This means that while it is normal practice to buy a series of small companies, buying a large company can be quite successful. This is a welcome augury for the Porsche - Volkswagen deal as the smaller company Porsche has been planning to buy a company 14 times its size. There is no correlation with acquiring a company in the same sector. This means that vertical and horizontal mergers have as much chance of success or failure as acquiring firms in another industry/sector. The study quotes the examples of two Hong Kong companies, Techtronic Industries (TTI) an original equipment manufacturer (OEM) of power tools and floor care products and LI Fung a major trading and sourcing company, both of which made acquisitions outside their fields of operation. In both the cases they were able to identify the 'strategic intent' that helps them design selection criteria for picking up the right targets. Between 2001 and 2005 TTI bought several companies in the US and Europe which helped it realise 38% growth in revenues, 49% in net income with the acquisitions playing a key role by contributing 20% of total revenues in 2005. Li Fung was able to realise annual growth rates of 14% annually between 2001 and 2005 by making a series of acquisitions in geographically diverse areas such as, Germany, Netherlands, Mexico and Indonesia. Diverting from its primary focus, which was the US in the 1990s, the company began exporting to European and other markets expanding its capabilities along the value chain and acquiring companies ranging from $ 4 million to $ 260 million totalling $ 640 million between 1994 and 2005. The relevance of these examples to the Porsche - Volkswagen deal is evident. Although both Porsche and Volkswagen are in the same automobile sector, Porsche with its sports cars and Volkswagen with its signature Beatle are as far apart in their fields of operation as passenger cars and earth moving equipment - and yet their merger can turn out to be as successful as the two examples cited if they are able to identify the 'strategic intent'. It is not important to clinch a deal in the fastest possible time. Due diligence with regard to vision, strategy and numbers underlying the deal pay. Success depends on the right fit - this is a part of the due diligence process and means that the acquiring company must ensure that the target company fits into its overall business strategy. (Booz Allen Hamilton Buying Right in Asia Successful M & As in a Challenging Market, 2007) Outlook for M & As in 2007: The Michigan, USA law firm, Dykema published the results of a survey on the outlook for M & As, it conducted during October 2006 in the "Hg.org", Worldwide Legal Directories portal. The survey polled company executives and their 'outside' advisors. The results generally maintain a positive outlook for the coming year (i.e. 2007 as the survey was conducted in 2006) but predict significant involvement from financial institutions and foreign buyers. Approximately two-thirds of the respondents were keeping a close watch on the M & A market as they planned some kind of acquisition in 2007. The responses received from respondents in Illinois and Michigan were separately analysed for regional trends. In case of an overlap, the responses were compared with responses to last year's survey. A significant observation of the survey was that 44% of the respondents believe that most foreign acquisitions in the US will be from China. Further they note that Chinese buyers are more visible than those from India because the Indians tend to come in groups. The most significant areas of concern for the respondents with regard to outbound cross-border mergers and acquisitions were due diligence (42%) and the absence of a predictable, transparent legal environment (35%). Similarly for inbound cross border M & As the concerns were due diligence (36%) and labour issues (32%). There were disagreements between company respondents and advisors in their predictions about M & As in specific sectors. But one observation - significant for this dissertation - is that 24% of company respondents believe automotive industry would be 'hot' for M & As whereas 21% chose the technology sector, 11% the biotechnology and life sciences sector as the industry, which will see global activity. On the other hand only 16% of the advisors believe significant M & A activity in the automotive sector, 18% in the energy sector and 18% in the technology sector. Key findings of the survey are summarised below: The inability of small and medium businesses to access public markets is aiding transaction valuation to remain at a reasonable level as an alternative to organic growth. The aggression of financial buyers as against strategic buyers is likely to continue; so does foreign buyers' pursuit to acquire US companies. A weakened dollar (its relative position being weaker than three years ago) is spurring increased M & A activity form foreign buyers. It makes US targets attractive and unless the currency strengthens considerably, the trend is likely to continue. But there are too many buyers chasing too few deals. There are more realistic valuations by strategic buyers with PEGs being actively monitored. Moderating access to debt markets will impact willingness to overpay. A slowing economy will submerge weaker companies and more transactions will be transformational rather than financial. This means more organizations will aim for strategic depth rather than growth. A weakening US economy is attracting more foreign investors who have built up sizeable cash reserves to expand their holdings in the US as a strategic business measure. High liquidity available in the markets and the slowing real estate boom have been inducing investors to plough funds into alternative sources to make money, which means fund markets are driving prices instead of supply and demand. The implications of these trends for the M & A markets are, the climate does not seem to be a growth vehicle as it was during the 1990s; investors are looking for long-term growth, synergy and stability, rather than short term returns and the regulatory environment is playing a more proactive role by advising caution. Whereas financial buyers do not have the experience to turn around companies, strategic buyers would be able to integrate acquired assets to derive synergies. (Annual Mergers and Acquisitions Survey, 2006) Defensive mechanisms against hostile takeovers: Alarmed by the number of hostile takeovers that are taking place in the US, Europe and the rest of the world including Japan, the Japanese Ministry of Justice constituted a committee headed by Prof. Hideki Kanda (Professor, University of Tokyo Graduate Schools for Law and Politics), to study the effects of mergers and takeovers on the economy in general, the adverse effects of hostile/structurally hostile takeovers, how they effect corporate value et al. The report mentions the defensive measures adopted by various nations against hostile takeovers especially to protect shareholders' interests, such as for example the (US) Williams act of 1968, which confers on the Securities and Exchange Commission the authority to superintend takeover bids. An important aspect of the US scenario is that the government has not instituted total purchase regulations as in the UK even after the rash of hostile takeovers in the 1980s. As a result of this the industry developed many defensive measures to counteract detrimental hostile takeover attempts such as two-tiered purchases and green mail. The report cites the decisions of the Delaware Supreme Court in the US, especially the 'Unocal Decision' of 1985, which laid down standards for defensive measures. The defensive measures that the 'Unocal Decision' stipulated were the "level of the acquisition price, the quality of the acquisition compensation, the timing and nature of the acquisition, problems of illegality, and impact on stakeholders." The implications of this judgement are far reaching and entail the adoption of due diligence procedures for fair valuation of the acquired company a necessary condition for such takeovers. The report discusses various defensive measures such as the Rights Plan/Poison pill, Golden Share, Super Voting Stock, Blank Check, Golden Parachute (high value retirement/severance packages for executives), Tin Parachute (high value retirement/severance packages for employees), Going Private, White Knight and Shark Repellent and some others. In addition the US has in operation several anti-takeover laws that protect shareholder interests in various states. (Kanda 2005, p. 50-55, 69 and 71) Review of 'synergy' as a concept in management literature: Johnson and Scholes define four corporate functions in organisations, the portfolio managers, restructurers, synergy managers and parental developers. The strategic functions of Synergy Managers are to 'share activities/resources or transferring skills/competences to enhance competitive advantage'; 'identify appropriate bases for sharing or transferring' and 'identify benefits which outweigh costs'. "Potentially, synergy can occur in situations where two or more activities or processes complement each other, to the extent that their combined effect is greater than the sum of the parts." (Johnson and Scholes 2004, p. 276). Van den Berghe and Verwiere (1998, p. 47) argue that mergers and acquisitions create value when there is both synergy and strategic fit (relatedness) between the acquirer and the acquired company. They cite Davis et al.: "the degree to which business units support or complement each other's business activities, particularly marketing and production." (Davis et al. 1992 cited in Berghe and Verwiere, 1998 p. 47). In this important chapter, the authors cite a number of authorities: "strategic fit and synergistic benefits as determinants of acquisition performance" (Datta, 1991 cited in Berghe and Verwiere, 1998 p. 47); "positive (results) and value creation ascribed to the presence of synergies between the acquirer and the acquired firm" (Jensen and Ruback, 1983; Bradley, Desai and Kim, 1988 cited in Berghe and Verwiere, 1998 p. 47); the lacunae in financial studies that have aggregated all types of acquisitions and "thus have not investigated how managers increase stockholder value." (Lubatkin, 1987 and Datta and Grant, 1990 cited in Berghe and Verwiere, 1998 p. 47); the 'resource based' view that holds that strategic fit captures synergy as a source of competitive advantage (Chatterjee and Wernerfelt, 1991) and "positive performance consequences of synergy" (Selton 1988, Davis et al., 1992, Brush 1996 cited in Berghe and Verwiere, 1998 p. 48). According to Iversen (1997) influential concepts such as "dominant logic" (Prahalad & Bettis, 1986 cited in Iversen, p. 1), "core competence" (Prahalad & Hamel, 1990 cited in Iversen, p. 1) and "corporate coherence" (Teece, Rumelt, Dosi and Winter, 1994 cited in Iversen, p. 1) all refer to exploitation of some kind of "similarity between businesses" for "achieving sustainable competitive advantage". Iversen cites Ansoff (1965) to explain the concept of synergy in detail. Sales synergy, which occurs when different products use common distribution channels, common sales administration, or common warehousing. Operating synergy, which includes higher utilization of facilities and personnel, spreading of overhead, advantages of common learning curves, and large-lot purchasing. Investment synergy is the result of joint use of plant, common raw materials inventories, transfer of R&D from one product to another, common tooling and machinery. Managerial synergy is possible when a new business venture faces strategic, organizational or operating problems, which are similar to problems that the management has dealt with in the past. (Ansoff, 1965 cited in Iversen, 1997, p. 2) Whereas Ansoff has not explained the reasons as to how these synergies translate into competitive advantage, Michael Porter has this explanation: "sharing has the potential to reduce cost if the cost of a value activity is driven by economies of scale, learning or the pattern of capacity utilization". (Porter, 1985 cited in Iversen, 1997, p. 2). Castaner (2000, p. 9) in his review of The Synergy Trap (Sirower, 1997 cited in Castaner, 2000, p. 9) reproduces Sirower's, postulates, warnings and recommendations about the concept of synergy: Sirower argues that most executives fail to realize that they have paid a premium to obtain synergies from an acquired company and that if they do not derive benefit out of it they would be destroying the net (post-acauisition) value by the dilution effect. Secondly exciting opportunities lead them to blunder on into bids without careful planning. Further, acquiring firms pay higher premia based on the advice of investment bankers who view them as comparable acquisitions, but without taking into effect the desirable synergy effect. Therefore premium should not be considered as a "proxy for the potential value for the acquisition". On the other hand, according to Sirower, based on the net present value (NPV) approach "the value of the acquisition equals the synergies minus the premium". Finally according to Sirower, synergies that do not meet at least one of the following two contestability criteria are no sustainable. They are, either the synergistic improvements should yield unique competitive advantage that competitors cannot replicate or the merger must offer totally new business opportunities. If it takes very long to realize the synergies, competitors may be able to catch up thus nullifying any competitive advantage that the firm might have acquired by the acquisition. Sirower advises acquirers to check the premises on which they base their valuations of synergy, develop a vision, back it up with a detailed operational strategy that spells exactly how the acquirer would achieve the projected synergies. Therefore executives should not lose sight of systems integration, the role that individual organizational cultures play in augmenting or defeating the objectives of the merger and the possible power play within the hierarchies pre and post merger. This is because if it takes too long to integrate the two entities, the greater will be the investment not only to catalyze the process but also to obviate the effects of negative performance - the phenomenon is known as "as escalation of commitment to a failing course". (Castaner, 2000) Due diligence and valuation: As we have seen earlier the objective of M & As is to create a "combined entity bigger than the sum of the independent entities prior to the merger". (Lasserre 2003, p. 140) The targeted benefits are summarised in the table below: Value creation in M & As (Lasserre 2003, p. 141) In order to achieve the objectives, the first priority is to do economic valuation to find out at what price the deal is to be concluded. There are three prevailing methods that are used to conduct such valuations. Asset-based valuation: This is a simple method, which values the assets minus liabilities. Physical assets are valued at a replacement price adjusting inventories or debtors book value. The valuation of intangible assets such as goodwill is arrived at a comparable value for similar businesses. This method is most suitable for physical assets such as goods in stock, machinery etc. It is not very reliable in case of intangible resources such as employees' knowledge, commitment and competences etc. Market-based valuation: This method relies on the direct valuation of the stock in the market or market equivalent situation using stock exchange market value. The bidder offers a premium on the valuation arrived at based on the anticipated synergies and value addition to the stock - short or long term. However, it is not possible to determine the premium purely based on stock market calculations. As the synergies and value additions occur some time in the future, current cash flows are calculated and projected to the future. Cash flow-based valuation: This is the only reliable method to truly arrive at the valuation of a company whereas the stock market valuation method can be relied on only when the market is really efficient. In this method the future cash flows are calculated as revenues - cash costs - increase in required working capital - future investments - taxes. This involves forecast revenues based on current and projected demand, price and market share assumptions for a reasonable future period, for e.g. 5 years. The second step is to determine the weighted average cost of equity and the cost of debt (WACC). The future cash flows for the acquired company without taking the merger into account - known as the stand-alone value method. As an alternative the discounted cash flow method is used. The synergies or value additions are arrived at as shown in the table above. These two values give the companies a base for bargaining the merger or acquisition price. (Lasserre 2003, p. 142-143) In the introductory part of this dissertation mention was made of a survey conducted by KPMG, the global consulting firm, about 700 M & As worldwide involving 107 companies between the years 1996 and 1997. According to the survey there were three hard keys, and three soft keys which the companies identified, in the pre-deal phase to ensure long-term success of the deal. They were synergy evaluation, integration project planning and due diligence; the soft keys were selecting management teams, resolving cultural issues and communications. The focus on the hard keys helped the companies achieve substantial value extraction in the shortest possible time. The results of the survey are summarised in the following graphic: Three pre-deal hard keys to success (Kelly 1999, p. 10) The survey has also pointed in which areas less successful companies were going wrong. In case of companies, which carried out a synergy evaluation and were able to identify the 'what' and 'where' value can be added it enhance their chance of success by 28% than the average. Companies, which thought through the integration process and put through measure to achieve this immediately after merger had a 13% better than average chance of realising synergies. And finally companies, which carried out the process of due diligence had a 6% better than average chance of achieving their objectives. Read More