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Impact of Culture on M&A: Survey Report

Culturelytics-Venture Intelligence Survey Report

Globally, mergers and acquisitions worth a total of more than $4 trillion take place every year. Studies show that more than 85% of these deals fail to create value, and in more than 30% of these, cultural misalignment is one of the key reasons cited.

COVID-19 will almost certainly trigger a significant wave of consolidations and a big spike in M&A activity, as companies scramble to survive and win in a marketplace characterized by VUCA. These deals are likely to be more cross border control stake transactions. We already see China making big investments in Italy, and Japanese companies turning their attention away from China towards India. Culture has never been more important than now. 

Key Findings:
  • Great team vs Great Idea:                                                                        
Nearly 67% of investors want to invest in an excellent team with a workable strategy/idea (would choose to combine an A-Team with a B- Idea/ plan/ strategy), as they felt that the right team can always make the best of an available strategy and that the right team is the key to the successful integration of two entities in a merger. A smaller number (33%) said they would choose a great idea over a great team, believing that a 'brilliant idea' is the first requirement and you can always get a 'winning team' to take it forward.
  • Value Adjustment Factor (VAF)                                           
95% of respondents said they would find it helpful to conduct 'Cultural Due Diligence' prior to a deal, adding this to existing finance, legal and commercial due diligence processes. 

Click Here to Download the Report.

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