Though most acquisitions destroy value, many of the top-performing companies are acquisitive

Mergers and acquisitions go in and out of style. The most recent M&A wave, and the largest ever, peaked in 2000 with $3.5 trillion worth of deals. But in a grim aftermath of vast goodwill write-offs, highprofile integration failures and distressed disposals, sentiment has turned against M&A once again. It is generally accepted that over the course of all business cycles, mergers and acquisitions play a key role in modernizing industries and increasing company value. Yet study after study has shown that most deals destroy value for the acquirer’s shareholders. How can M&A be both a public virtue and a private vice?

Research undertaken by Marakon to explain this paradox reveals that, although many acquisitive companies do destroy shareholder value, some of the world’s best-performing corporations are also acquisitive.