Key points
- Test strategic fit before valuation: a good price for the wrong asset is still a poor deal.
- Plan for regulatory and national-security review from day one.
- Name an owner for every synergy before signing.
Boards approve acquisitions with good intentions and good advisers. Yet many cross-border deals still fall short of the case that justified them. In our experience, the gap usually traces back to five questions that were asked late, or not at all.
1. Why this deal, rather than any deal?
Momentum is powerful. Once a target is in play, the conversation shifts quickly to price and timetable. Before that happens, the board should be able to say in one sentence how this deal advances the strategy, and what the company would do instead if it walked away.
2. What will governments need to see?
Foreign investment screening has widened in many countries, and reviews now reach into sectors once thought routine. Engaging early with the authorities, and understanding what they will ask, protects both the timetable and the relationship.
3. Which synergies are real, and who owns them?
Synergy cases are often built by people who will not be accountable for delivering them. Every material synergy should have a named owner, a timeline and a measure before the board approves the deal.
A synergy without an owner is a hope, not a plan.
4. What happens to the people we are paying for?
In many acquisitions, the value sits with a relatively small number of people and customer relationships. Retention plans, leadership roles and communication should be ready on day one, not designed in month three.
5. How will we know it is working?
Agree in advance the few measures that will tell the board whether the deal is on track at six, twelve and twenty-four months. Then review them honestly.
None of these questions is new. What separates good acquirers is the discipline to ask them early, and the willingness to walk away when the answers are weak.
