Formulate a Clear M&A Strategy

Mergers and acquisitions are a strategic choice. Favorable regulatory environments, economic expansion, the emergence of new technologies, high stock prices, and liquidity in credit markets have all contributed to creating “waves” of M&A characterized by periods of high and low transaction volumes. M&A is a high-risk growth strategy, with ample evidence demonstrating that buyers struggle to capture value from their transactions. Yet, the Oxford M&A Insights Project found that almost two-thirds (64%) of respondents indicated that their company is “very likely” or “likely” to conduct future transactions. This chapter provides an overview of the strategic options for M&A and how firms develop their M&A strategies. The tools, templates, best practices, potential pitfalls, and a case example of how to go about setting a clear M&A strategy are also addressed, along with the main participants, core activities, buyer’s and seller’s perspectives, and key cross-border considerations.