Phoenix Water - PXW - Lithium - 100x, page-1974

Article by mckinsey delays in-m&a deals

Times have changed. Over the past two years, some 30 percent of the 50 largestglobal acquisitions (by deal size) experienced delays attributable to factorsbeyond their control-up from 15 percent in 2020. On average, deals stalled forsix months, but the longest delay exceeded 15 months. Several factors were toblame-notably, heightened geopolitical tensions, increasingly complexintegration (due to more cross-border transactions), and obstacles to securingshareholder approval.

Deal delays can destroy significant value and undermine momentum and morale in several ways,including:

• Retention of internal and external M&A integration team members is difficult and costly.
• Delays prolong distraction from business-as-usual and core activities, especially becausecritical talent stay out of their day jobs longer than planned.
• Delays adversely affect employees and shareholders who often experience tremendous anxiety, fatigue, andwavering confidence and commitment, especially when the deal is large and theuncertainty is prolonged.
• Delays open a window for competitors to prepare responses, poach customers andemployees, and take advantage of the uncertainty to leap ahead of encumbered peers.