Why acquisitions fail

By Denzil Rankine, Executive Chairman, AMR International

Acquisitions are proven to deliver excellent growth and can transform a business. But any transaction can be risky, with a 50% failure rate often quoted.

To identify the main pitfalls of an acquisition, AMR conducted an independent survey of over 350 transactions and analysed over 70 case studies.

From this research we 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.

All 20 reasons are outlined in the chart below. These are grouped into the five steps of an acquisition; starting from initial planning through to the completion of integration.Why acquisitions fail

To avoid these pitfalls, a buyer needs a sound strategy, thorough due diligence and well-planned integration.

Well conducted 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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