PwC

Doing the Right Deals

Why capabilities are more important than ever for M&A


Global M&A activity is back to firing on all cylinders. But, it’s not just the volume of activity that has changed, so has the rationale, reflecting businesses' need to create value, drive growth and resilience.

In today’s market, how can leaders ensure their deals create value?


Capabilities have always played a pivotal role in business success - but the speed and scope of the changes underway in the wake of the pandemic have escalated their importance even more.

Our latest research analysed the strategic fit of the largest acquisitions over the past 10 years, to show how those based on a capabilities strategy are the best placed to deliver sustained outcomes. Download the report to explore the findings and read about our five steps to maximise value from deals.

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14.2%

Significant capabilities premium

Potential 14.2% points increase in total annual shareholder return versus limited-fit deals. In many sectors, acquisitions that don’t focus on capabilities risk value loss.

$916 billion

Transaction value gets lost

$916 billion of transaction value was lost from deals with a limited fit in capabilities between the buyer and the target.

27%

Limited fit

1 in 4 of the deals we analysed had a limited fit capability strategy and therefore missed the opportunity for a capabilities premium.

Chris Temple

UK Value Creation leader, PwC UK

"By identifying the factors that can make a real difference, such as capabilities and a focus on ESG, dealmakers can put themselves in the best possible position to win the value creation race."

Lucy Stapleton

UK Deals Leader, PwC UK

"Optimism in the market is well-founded. The factors that are fueling the boom in deals activity, such as private equity's huge reserves of dry powder, haven't changed but well-prepared dealmakers will always take account of all angles and potential risks."

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