According to management consultants Philip Dunne and Angus Hodgson, major stakeholders in mergers and acquisitions tend to overemphasize earnings per share (EPS) as a metric for assessing potential success. However, “EPS accretion” doesn’t necessarily enhance shareholder value, nor does “EPS dilution” always destroy it. Other measures can be more valuable in predicting whether an M&A deal will prosper. getAbstract recommends this astute overview to executives and investors considering an M&A transaction now or in the future.
In this summary, you will learn
- Why mergers and acquisitions often fail to enhance shareholder value,
- Why earnings per share should not be your only M&A evaluation tool, and
- Why executing “fact-based due diligence” is the best way to predict M&A success.
About the Authors
Philip Dunne is a partner with global management consultancy A.T. Kearney, where Angus Hodgson is a principal.