Mergers and acquisitions designed from the start to enhance or leverage companies' distinctive strengths significantly outperform transactions that are not capabilities-driven, according to a study by global management consulting firm Booz & Company.
"This study demonstrates an important truth about mergers and acquisitions: Structuring transactions with capabilities in mind can result in deals that outperform peers and that avoid 'adjacency traps.' This fact has never been more important than today," says J. Neely, a Partner at Booz & Company.
Specifically, the study found that transactions designed to enhance or leverage core capabilities produced an additional 12 percentage points of annual shareholder return, on average, compared to deals with limited capabilities fit.
The study looked at 320 transactions that took place between 2001 and 2009 in eight industry sectors, calculating shareholder return over the two years post-close and incorporating post-close performance data from 2001 to 2011.
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