With the global liquidity crisis set to fuel new merger and acquisition (M&A) activity this year, a new report by global management consultancy Arthur D. Little claims that despite the growing experience with mergers over the last seven years, the failure rates stay at a high level.   To avoid becoming another statistic, Arthur D. Little's "
Winning the Merger Decathlon" outlines a 10 step approach companies can take to ensure a merger will boost productivity and profitability without bringing additional risk to existing business.
According to Arthur D. Little's latest report, the three major drivers to M&A that will continue fueling deal activity in 2009 are: continued corporate restructuring; industry consolidation in mature markets; and finally, a desire of established players to exploit growth opportunities in emerging markets.
In one of the M&A case studies detailed in this report, Casinos Austria, having gained a majority stake in Österreichische Lotterien (Austrian Lotteries) in late 2007, followed a clear strategy to simultaneously develop a single centrally-functioning headquarters while allowing the two companies' six customer-facing business units to continue operating independently.  The project, entitled "Strong together!" ensured the headquarter restructuring yielded maximum cost-savings, while at the same time allowing the six independent business units to carry on with operations virtually unaffected.
Ten steps to success
Based on an analysis of corporate post-merger integration projects across industry, Arthur D. Little identified the 10 most important considerations managers must make to successfully move forward from a corporate merger. The Merger Decathlon follows:

1. Follow a clear strategy
2. Pick the right deal
3. Leverage the pre-closing period
4. Adapt integration approach and speed
5. Take critical governance decisions upfront
6. Invest your best resources
7. Keep your eyes on the ball
8. Capture synergies in the bottom line
9. Communicate
10. Address the cultural differences

Michael Ungerath, the report's author and a Director in Arthur D. Little's Global Strategy & Organization Practice, commented on the report's ten key findings:
"Whether looking to M&A to enter new growth markets, to consolidate services in mature markets, or to acquire new technologies, the current recession climate means companies considering merging in 2009 must developing a winning strategy upfront, or else risk losing the value of their investment in a failed merger."
The aim of Arthur D. Little's ten-step guide is to address the full range of considerations necessary for acquiring companies to ensure successful organizational and cultural integration.  With the credit crunch forcing consolidation as well as providing opportunities to use acquisition as a market entry strategy, businesses can no longer afford the costs of a failed M&A pursuit.
Winning the Merger Decathlon is now available for download at
www.adl.com/mergerdecathlon.