How Successful are M&A's?

• A 2011 study by KPMG found that only 31% of M&A deals completed between 2007 and 2009 added value. In the two years prior to that, it was 27%. Source.

• Global mergers and acquisitions valued at $4.9 trillion were announced in 2015, more than the 2007 peak. While there were 38,000 deals, over a tenth of the value was from the five largest deals. (Same source as above.) This works out to an average deal size of $116 million excluding the five largest.

• Beware of the M&A deal that doesn't take into account the business cycle. A case from recent history is Walter Energy, a company that mines the type of coal used in steel making. Its stock has fallen from $120 in 2010 to 1.25 cents. The company's bankruptcy hearing was last July. The company suffered from the falling price of coking coal, which stood at $230 per ton in 2010 and $100 per ton in 2015, same as 2005 prices. See article here.

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