Our leading research on mergers and acquisitions
PwC’s Strategy& conducted a new study of mergers and acquisitions in 2015. Having studied 540 transactions across nine industry sectors (chemicals, consumer staples, electric utilities, financial services, healthcare, industrials, information technology, media, and retail), we confirm our 2012 finding that deals made with a capabilities perspective perform significantly better than acquisitions with limited capabilities fit. The capabilities premium has even increased: while capabilities-driven deals generated annual TSR 12 percentage points better than limited-fit deals in our 2012 study, the 2015 study finds a full 14 percentage points capabilities premium. Deals linked to a capabilities-driven strategy have tended to increase shareholder value for the acquiring company – while most other inorganic moves have led to a loss of value. All industries we studied show a consistent, observable capabilities premium in M&A.
Twelve years of data shows that mergers and acquisitions that apply or enhance capabilities produce superior returns.
A study of inorganic growth shows that deals made to enhance or leverage the things that companies do well consistently outperform others.
We have analyzed 540 M&A transactions that were announced between 2001 and 2012 in nine industry sectors. You can experience all 540 deals in an interactive infographic that shows transaction value, announcement date, capabilities fit as well as annualized 2-year return compared to market index.
The main finding of the Deals That Win study is summarized in this infographic. See for yourself what the benefits are in conducting deals that are capabilities-driven.
In this first episode in a two-part series, Gerald Adolph, senior partner and leader of Strategy&'s Mergers and restructuring group, interviews J. Neely, a partner at the firm, about new Strategy& research finding that transactions designed to enhance or leverage companies' core capabilities outperformed other deals. The premium was on average 12 percentage points in terms of shareholder return.
In this second episode in a two-part series, Gerald Adolph, senior partner and leader of Strategy&'s Mergers and restructuring group, continues his interview with J. Neely, a partner at the firm, about new Strategy& research finding that transactions designed to enhance or leverage companies' core capabilities outperformed other deals. They explore some specific cases where capabilities took center stage, looking at companies including Danaher Corp., Li & Fung Ltd. and Walgreen Co.
Based on extensive research, The Essential Advantage helps you construct a strategically coherent company in which the pieces reinforce one another instead of working at cross-purposes.
“The Coherence Premium” lays out the importance of coherence for sustainable business success and presents that sustainable, superior returns accrue to companies that link capabilities.