Abandoned Acquisitions: Why do some deals fail to complete?
New research study by Cass Business School and Intralinks reveals significant predictors of deal failure.
7.2% of worldwide M&A deals announced last year failed to complete – the highest rate of deal failures since the start of the global financial crisis in 2008. Why are some deals more likely than others to fail? What factors are significant predictors of deal failure? What can acquirers and targets do to increase the likelihood of successful deal completion?
Seeking to answer these questions, the M&A Research Centre at Cass Business School, City, University of London and Intralinks analyzed 78,565 transactions, involving 102,396 acquirers and targets, announced over the past 25 years. We also interviewed 40 M&A professionals worldwide who offer their insights and provide context to the research findings.
These findings, published in this report, include:
- The five significant predictors of public M&A deal failure and the four significant predictors of private M&A deal failure
- Strategies acquirers and targets can use to avoid the deal failure trap
- How rates of abandoned acquisitions differ by region, country and industry
- How unexpected outside events affect deal completions
Failed deal completions impose significant deadweight and reputational costs on acquirers and targets. Our research, which identifies the most significant predictors of failed deals, will help both parties in a transaction to increase the likelihood of successful deal completion.
— Philip Whitchelo, VP Strategy & Product Marketing, Intralinks
Watch a panel discussion on the mysteries behind why some deals are more likely than others to fail and what factors are significantly predictive of deal failure: