M&A and Diverstitures

The Synergy Trap

Mark Sirower

Mergers and acquisitions have clearly become the favorite corporate growth strategy of this generation's executive teams. Unfortunately, the dilemma facing executives is that the majority of these transactions are, on balance, hurting their shareholders. Many acquisitions are predictable failures right from the beginning. The Synergy Trap focuses on the fundamentals of informed acquisition decisions-particularly the notion of synergy and the competitive conditions that must be met to justify transaction prices. Because of the unique gamble that acquisitions represent, executives must clearly understand the financial, strategic, and implementation issues of deals before approaching the negotiating table with the corporate checkbook open. In short, The Synergy Trap sets an agenda for the up-front planning issues that drive shareholder value creation in acquisition strategies.

M&A and Divestitures