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By Denzil Rankine, Executive Chairman, AMR International (Acquired by Stax in 2022)
Mergers and acquisitions can deliver excellent growth and significantly transform a business. But as we all know, any transaction can be risky.
To identify the main pitfalls of an acquisition, we conducted an independent survey of over 350 transactions and analysed over 70 case studies.
From this research AMR were able to pinpoint 20 reasons why an acquisition can fail. Often it’s not a single reason, but a combination of factors that leads to disappointment.
We outline these 20 reasons in the chart below. These are grouped into the five steps of an acquisition; starting from initial planning through to the completion of integration.
How can a buyer avoid these pitfalls? The answer lies in having a sound strategy, thorough due diligence and well-planned integration.
If conducted well, commercial due diligence can help a transaction to proceed smoothly. It should also identify value creation opportunities for the new owner.
This blog is an excerpt from Denzil’s original book – Why acquisitions fail: Practical advice for making acquisitions succeed.
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