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The 2018 M&A Report
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The 2018 M&A Report

Synergies Take Center Stage

Jens Kengelbach, Georg Keienburg, Timo Schmid, Dominik Degen and Sönke Sievers
Boston Consulting Group, 2018
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Editorial Rating

8

Qualities

  • Analytical
  • Overview
  • For Experts

Recommendation

The word “synergy” is a well-worn term in the jargon-filled world of business. But when it comes to mergers and acquisitions, it’s an increasingly important one. Recent announcements about M&A synergies have raised valuations for targets and boosted publicized returns for acquirers. But investors are becoming more discerning and less willing to take promises about synergy at face value. Executives, board members and investment bankers will find this overview from the Boston Consulting Group a useful guide to the M&A environment. 

Take-Aways

  • M&A activity remained stable in 2017, and in the first six months of 2018, deal values exceeded the average for comparable periods since 2009.
  • Strong demand has raised target valuations, which now top those that prevailed during the e-commerce bubble in 1999.
  • In a major break from the typical outcome of buyers’ stocks falling following the announcement of an acquisition, acquirers’ equities have experienced positive announcement returns since 2013.

About the Authors

Jens Kengelbach et al. are professionals at the Boston Consulting Group. Sönke Sievers is a professor at Paderborn University in Germany.

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