I attended a seminar arranged by Hiro*, a friend of mine, who has been a super active SDG advisor. The topic was M&A. He mentioned that almost 70 percent of M&A deals end up unsuccessful. There should be some definitions of “unsuccessful deals” however, from my point of view, I feel that means poor financial results, almost no synergies, a drop in stock prices, or some other indications of negative corporate reputation. I found out that the principle reason of disappointment is the post merger integration: PMI. Teams who are responsible for PMI rarely get involved in the M&A process. M&A Advisors put less importance on PMI process and actual its management. Most interestingly, Hiro mentioned, on the day one of PMI, what kind of message the new CEO releases to the people in the merged company, is actually the most important part of PMI. His/ her attitude, intention, compassion, vision, mindset and personality, all of them are carefully watched by new staffs. Thus, before or during M&A process, the top management should always keep in his/ her mind that what is the ultimate objective of this M&A deal and how he/she can communicate his/her vision with new staffs.
Therefore, I realized that for most managements, pursuing higher philosophical values even in business field is quite important.
Regarding Corona pandemic, more and more bankruptcy cases will come to the market, and those are of course M&A opportunities for potential players who have been carefully watching the timing of new market entrance. For companies to be merged, this is a good turning point of re-considering their business models and of getting involved into a much larger business groups through M&A. Further details of M&A market in Japan will be reported in due course in this site.
* Hiro’s company: Social Capital Management Co.Ltd
https://www.social-capm.com/, please open with Google Chromn
