Deloitte: Are Boards and CFOs in the Middle East aligned when it comes to M&A?DOWNLOAD
11 December, 2013- With several high value mergers and acquisitions (M&A) expected to take place in the MENA region over the coming months, the question of whether now is the time to consider an M&A growth strategy is becoming more evident.
Deloitte, in association with Corporate Board Member magazine, surveyed corporate directors and CFOs from public companies with revenue of $500 million and above, to compare, contrast, and analyze their views on M&A and risk.
The Deloitte survey, “Bridging the Gap: M&A, Are CFOs and boards aligned” indicates that industries such as oil and gas, telecoms and financial services are all expected to see more robust M&A activity over the coming 12 months. This is buoyed by the recent announced deals such as Etisalat’s offer to buy Vivendi’s 53% stake in Marco Telecom for $5.27 bn and China’s Sinopec acquisition of a 33% minority stake in Apache Corporation’s oil and gas business in Egypt for $3.1bn. With many risks and issues to consider around M&A, there is an ever growing call for more effective handling of these transactions.
Effective M&A decisions depend upon strong collaboration and communication between the board and Chief Financial Officers - CFO – especially if both parties are focused on creating value by taking strategic risks. Are board members and CFOs strategically aligned when it comes to risk management and value creation in M&A activities?
“While directors and CFOs are largely consistent in their overall view of M&A strategy and valuation, this “Bridging the Gap” survey indicates that their views could be more aligned in other areas. This is particularly the case with respect to primary M&A objectives, and especially with regard to cost synergies and scale efficiencies,” explains James Babb, CFO Program leader at Deloitte Middle East.
“Given the risks, potential benefits, and the specific roles each party plays in M&A, these transactions represent an area in which boards and CFOs would likely do well to bridge any gaps in communication, perception, and understanding. Successful M&A decisions and post-event implementation depend upon strong alignment between the board and senior executives,” he added.
Overall, the Deloitte survey results indicate that:
To view the full results of the “Bridging the Gap: M&A, Are CFOs and boards aligned?” survey, go to: http://bit.ly/13jnWh8