The network knows: How can companies enhance innovation through mergers, acquisitions and minority stake investments?

Tim Callington

30 June, 2016

1987

1988

1989

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1997

1998

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2007

2008

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2015

-

50,000

100,000

150,000

200,000

250,000

300,000

0

200

400

600

800

1000

1200

1400

1600

1800

2000

UK Acquisitons: 1987 - 2015

Value Volume

Acqu

isitio

n va

lue

(£ m

illion

s)

Acqu

isito

n Vo

lum

e

M&A by numbers (the bad news)58% failure

rate, based on financial return

exceeding cost of capital

McKinsey & Co. 1999

50% deliver ‘poor returns to

shareholders’ after three yearsMercer, 1997

58% fail to deliver substantial

returns to shareholders

A.T. Kerney, 1997

-2.0% average loss to bidder shareholders

Goergen & Renneboog, 2003

+30% average return to

shareholders of target firm

Bhagat et al., 2005

-3.8% fail to deliver substantial

returns to shareholders

Andrade et al., 2001

-15.5% decline in shareholder

return over three years

Antoniou et al., 2007

-16% average return to target shareholders

Cash et al., 2005

-18% average return to target shareholders

Sudarsanam & Mahate, 2003

More people – more quality ideas (R&D

inputs)

New skills & capabilities

New customers and

markets

Patents filedIncreased revenue from new products &

service

The opportunity

Thank you for your time

Tim CallingtonTw: @timcallington

Li: uk.linkedin.com/in/timcallington