Mergers and acquisitions are among the most challenging areas of board oversight. Not only does M&A activity draw more lawsuits than any other boardroom issue, but most M&A deals aren’t as successful as projected – a testament to their complexity.
Acquisitions are so complicated. There are many different areas to make sure that you get right [in order to] really deliver shareholder value or the synergies that you are looking for. First, there are the components of the actual deal itself, but then there’s the integration that follows after the deal. There are a lot of ways where [M&A activity] can go a little sideways… There are a lot of possibilities for things to go wrong.
In this episode, Paula Loop delves into the complicating factors of M&A activity and outlines the various aspects that boards must oversee. How is the board communicating the M&A strategy to shareholders? Has the board developed a pricing framework for management? How involved is the board with assumption modeling or the integration strategy?
Oftentimes, companies will breathe a sigh of relief once the M&A deal is made; however, that’s when the real work starts, says host TK Kerstetter. Loop and Kerstetter discuss the board’s oversight responsibilities related to both culture and talent as two companies merge.
PwC’s Governance Insights Center has recently released two board publications to address the challenge of M&A deals and related topics. Don’t miss those resources below:
Acquisitions offer many advantages for company growth. Many deals, however, fail to deliver on their potential value. This publication outlines how boards can take an active role throughout the process.
When contemplating an IPO, boards and management are presented with several challenges related to the ever-evolving capital markets. What questions should boards be asking?