Beware of myopic performance metrics when assessing mergers and acquisitions.
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
- Why executing “fact-based due diligence” is the best way to predict M&A success
Comment on this summary
Customers who read this summary also read
Peter Van Tassel
Federal Reserve Bank of New York, 2016
Lars P. Feld et al.
CESifo Group Munich , 2016
Jens Kengelbach et al.
Boston Consulting Group, 2015
Benjamin Graham and David Dodd