Regulation and political uncertainty pose potential threat to dealmaking
Despite confidence in increased deal activity, as 56% of BCM executives say they expect to close more deals in the coming year than they did in the previous year, 85% are willing to walk away if the deal isn’t right. This is particularly true if regulatory or government intervention or increased competition threaten to derail a potential deal. In fact, more than half (52%) of BCM executives indicate that regulation and political uncertainty pose the biggest potential risk to dealmaking in the next 12 months.
Post-deal integration becomes a more prominent pre-deal consideration
With M&A gaining momentum in BCM, 41% of companies indicate that they are starting integration planning earlier to capture synergies and maximize deal value. Past experience appears to be shifting future behaviors, as 44% of BCM companies admit to achieving lower synergies when compared with the synergies identified at the time of the deal.
BCM companies accelerate portfolio reviews to improve agility
Under pressure from investors to maintain margins, BCM companies are stepping up their portfolio reviews. Almost three-quarters (73%) say they review their portfolios at least every six months. Disruptive forces and geopolitical uncertainty are two reasons. The ability to pivot and adjust to respond to changes that impact access to customers is another. In doing so, 70% of BCM companies have identified underperforming or disruption-prone assets ripe for divestment.