M&A and Divestitures Challenge

Mergers and Acquisitions

The initial phase in mergers and acquisitions seems to be the simplest: choosing the M&A target. Yet acquirers often pursue targets opportunistically, rather than methodically, contributing to high failure rates. BCG’s mergers and acquisitions consultants help clients create the strategic, replicable merger and acquisition processes that drive successful corporate unions.

Choosing the wrong target for a merger or acquisition can be easy to do. Companies may be motivated by the sudden availability of appealing prospects or by cash surges that encourage spending.

Successful acquirers use disciplined processes to search for targets, asking, “Which deals will help us realize maximum value?” not “How fast can we get this one deal done?” In effect, they treat mergers and acquisitions as one more essential line of business.


How BCG Supports Successful Mergers and Acquisitions

BCG’s mergers and acquisitions consultants bring a strategic, value-creating perspective to every engagement to deliver fresh insights via an efficient, results-oriented process.

We also help you avoid some all-too-common traps for M&A. For example:

Reason for Failure

  • Inadequate integration concept
  • Wrong business logic or fit
  • Wrong acquisition candidate
  • High price but low synergies

How BCG Adds Value

  • Prepare integration well before day one
  • Develop and validate strategic rationale
  • Assess strategic fit and synergies for each target
  • Help you negotiate on the basis of key value drivers

BCG tailors your merger and acquisition strategy through an iterative, highly collaborative approach. Our mergers and acquisitions consultants serve as partners for senior management, drawing on our global network and cross-industry perspectives, supported by proprietary methodologies and digital tools.

We help you pursue buy-side mergers and acquisitions and create or enhance replicable mergers and acquisitions processes in-house.

Because BCG views value creation in mergers and acquisitions as a continuum, we’re also prepared to support you at every stage, from transaction strategy to post-merger integration. M&A target identification typically takes about 3 months and is the first step in a process that can last up to 18 months.

Our M&A transaction services combine our extensive expertise in all types of M&A-related processes, such as due diligence, with our industry-specific expertise, such as consumer M&A and health care M&A.


BCG’s Five Steps for Initiating an M&A Target Search

  1. Generate ideas. Apply different lenses to develop a long list of potentially attractive industries and segments: consider different classification approaches, database and IP screening, and the relevance of such megatrends as climate change and shifts in international trade.
  2. Prioritize the long list of industries and segments. Carry out an initial assessment of structural attractiveness. Generate about 200 candidates.
  3. Create and categorize the short list. Develop common-sense exclusion criteria for segments and targets. Pare down to 20 to 30 companies. Profile and analyze from multiple angles, including risks. Check availability.
  4. Refine the short list. Further evaluate segments and companies. Reduce to fewer than ten targets
  5. Launch a deep dive into the M&A target. Thoroughly explore feasibility, financing, risks, and other vital dimensions—and prepare for initial due diligence.

Our Insights on Mergers and Acquisitions


Our Experts on Mergers and Acquisitions

Our mergers and acquisitions consultants and industry experts help clients search for and identify targets, as well as handle change management, during mergers and acquisitions.

Subscribe to our M&A, Transactions, and PMI E-Alert.