Knowing when to fold

Author: John Crabb | Published: 11 Dec 2018

Even if M&A parties are initially dealt a good hand, the deal can fall apart

For one reason or another, things often have the habit of falling apart when you least expect them. Best laid plans that may have taken weeks, months or years to put into place can come crashing down in the blink of an eye. Occasionally there are explanations as to why these plans have failed to come to fruition, other times you are left scratching your head in disbelief.

In the world of finance, economics and law, however, very little goes unexplained. When an M&A deal fails, there will be a concrete reason and those lawyers, bankers and deal brokers who billed hundreds of hours building the deal will carefully dissect it until they ascertain exactly what the problem was. Often it will be issues with integration, regulatory concerns, poor due diligence or valuation;...