Unlocking value from M&A

19 October, 2014 – There are several reasons why mergers fail to deliver value to organizations, however a successful integration program, carefully planned and executed with the right resources, can often be a key determinant of merger success.  A recent Deloitte study of FTSE100 company chairmen, company boards need to focus more on how integration is delivered, not just on the execution of the deal.

Key findings of the study: 

• 80% of chairmen felt that reviews of an integration by the board occur infrequently;
• Two thirds of respondents reflected that the board should be provided with information on the progress of a major integration as often as the board meets
• Over 50% of the chairmen said that limited consideration is given to the integration at the point when the board is asked to approve the transaction
• All respondents commented that it is important for the executive management team to have experience of managing an integration

Post Merger Integration (“Integration”), a term referring to the combination of two (or more) separate organizations into a single entity, is a complex program of work involving people, resources, tasks and supporting information technology (“IT”).  The challenge is compounded in the Middle East, where differences in ways of working, attitudes and operating practices make the adoption of a “western” style approach less feasible.

Rapid business growth, consolidation and increased foreign entrants into this region has resulted in an increased demand for M&A, and specifically merger integration and separation specialists. To better meet the needs of its regional client base, Deloitte continues to invest in a specialist team of Integration experts who are based in the region.  These integration experts are highly experienced and have led numerous integration and separation programs, and bring experience of managing complex programs in Middle Eastern organizations.

As such, Deloitte’s EMEA integration leaders, Angus Knowles-Cutler and Glen Witney, will visit the region during October. Angus and Glen bring extensive merger integration and separation experience, having led several high-profile programmes across the globe and for a broad range of industries. Angus and Glen will be in the region to conduct a roadshow to provide more insight on Integrations and the value that can be delivered through use of a structured approach and experienced team. They will also share insights and key success criteria pertinent to the Middle East.

“Capturing synergies, both cost and revenue, is usually the driving force behind the decision to merge two companies. The integration team works toward fulfilling these promises by identifying functional and operational areas where costs can be reduced,” explains Knowles-Cutler. “They also assess market revenue opportunities to capture the deal’s value by evaluating customer, market and product synergies”.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities.  DTTL (also referred to as “Deloitte Global”) does not provide services to clients.  Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.   

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.

About Deloitte & Touche (M.E.)

Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.

Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).