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From Buying Growth to Building Value
Report

From Buying Growth to Building Value

Increasing Returns with M&A

Jens Kengelbach, Georg Keienburg, Ketil Gjerstad, Jesper Nielsen, Decker Walker and Stuart Walker
Boston Consulting Group, 2015
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Editorial Rating

8

Qualities

  • Applicable

Recommendation

A global recovery is helping the value of mergers and acquisitions to grow across a broad geographic and industry spectrum. While the number and size of deals are on the rise, history shows that most transactions fail to add value or achieve anticipated synergies. To avoid the pitfalls that often come with buying and integrating companies, acquirers need to devote significant time and energy to the process. Boston Consulting Group professionals offer timely research and advice to firms looking to create growth and value, and getAbstract recommends their expert work to corporate executives and strategic planners.

Take-Aways

  • The transaction value of mergers and acquisitions in 2014 rose 20% over the previous year to nearly $2 trillion, and 2015 promises to be another robust year.
  • Between 1990 and 2014, firms that acquired businesses grew an average of 6% per year, versus 5% for those that invested strictly in organic growth. The more companies that acquirers bought, the faster their earnings rose.
  • But often, acquisitions actually destroy shareholder value, as hoped-for synergies fail to materialize due to poor target choice, inadequate deal preparation or bad market timing.

About the Authors

Jens Kengelbach et al. are professionals with the Boston Consulting Group.

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