On the long-term, M&A will be optimised as a normal business process:
- Increasing standardisation of processes, supported by a growing role of IT collaborative and reporting systems
- Submitted to regular optimisation efforts as to the performance of the M&A work (eg the fit with initial strategy, the quality of execution, the synergy gains delivered,...)
- Staffed by executives coming from various backgrounds (engineers, finance, HR,...)
A major issue to be faced by the M&A function relates to its organisational scope and position:
- A more integrated vision of the process, from strategy to synergy delivery appears to be among best practices. It accelerates delivery, reduces risks, and limit the current discontinuities between stakeholders which are observed in most groups.
- M&A directors may take the responsibility for such a transversal process, but this may also be taken by other functions as well (strategy, business development,...).
In the short-term, the M&A market downturn will have an impact on some fundamentals of the business.
The slowdown observed since August 07 will continue to have an impact of the overall M&A activity at least until 2008 year-end.
Strategic buyers and cash-rich investors will take a leading role in the coming months. The PE industry will renew its approach.
This slowdown is however partly offset by strong underlying business rationale for deal-making:
Some major deals are still announced by cash-rich firms
The growth of new M&A players (Asia, Russia, Middle-East) building on strong domestic growth rates
The emergence of new business drivers (environmental issues, energy, ...).