FINWIRE®

M&A needn’t spell inefficiency for corporate consolidation in 2009, encourages new report from Arthur D. Little

January 15th, 2009

With the global liquidity crisis set to fuel new merger and acquisition (M&A) activity this year, a new report by global management consultancy Arthur D. Little claims that despite the growing experience with mergers over the last seven years, the failure rates stay at a high level.

According to Arthur D. Little’s latest report, the three major drivers to M&A that will continue fueling deal activity in 2009 are: continued corporate restructuring; industry consolidation in mature markets; and finally, a desire of established players to exploit growth opportunities in emerging markets.

In one of the M&A case studies detailed in this report, Casinos Austria, having gained a majority stake in Österreichische Lotterien (Austrian Lotteries) in late 2007, followed a clear strategy to simultaneously develop a single centrally-functioning headquarters while allowing the two companies’ six customer-facing business units to continue operating independently.

The project, entitled “Strong together!” ensured the headquarter restructuring yielded maximum cost-savings, while at the same time allowing the six independent business units to carry on with operations virtually unaffected.

“Whether looking to M&A to enter new growth markets, to consolidate services in mature markets, or to acquire new technologies, the current recession climate means companies considering merging in 2009 must developing a winning strategy upfront, or else risk losing the value of their investment in a failed merger.”

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