50,000+ M&A deals in 2017 and its only the start of disruption.
Benjamin Gomes-Casseres in a recent Harvard Business Review article did a great job classifying this year's notable mega-Mergers & Acquisitions into a handful of easy to think about categories.
Each category relates to an industry in transformation in which key players are seeking to align their offerings with how we live and work. You can access the article here.
Most of these deals boil down to an integration or diversification aimed at making a step-change improvement to a customer experience. The objectives are to: (a) stay relevant; (b) build revenue, margin and share; and (c) stay ahead of the next disruption, or better still, disrupt a disruptor.
Unsurprisingly, this requirement to adapt and affordably deliver increasingly better experiences is being driven by the weighty millennial cohort, a group that is about to enter its peak years of consumerism.
Millennials have a preference for 'sharing economy' experiences because affordable access to compelling experiences is valued more than ownership.
But it's not just as consumers. Millennials are also expected to account for around 50% of the global workforce in 3 years from now. This means that if a product or service does not deliver into the socio-economic contract drafted by the soon-to-be largest ever consuming/working generation, it will be disrupted.
These factors are driving corporate transformations.
What's quite evident though is the inability of many companies to transform organically. This can be for many reasons, but in many cases that I see it is because culture is not as elastic and adaptable as strategy.
Hence, the popularity of mergers, takeovers, tender offers and schemes. And, if 2017 is any guide, 2018 is likely to be an exciting year as competitors utilise more Mergers & Acquisitions to rebuild experience, advantage and market share.
Happy New Year!
NextLevelCorporate delivers independent and transformative corporate finance solutions to clients looking to reshape their competitive landscapes, in and out of Australia. Our ability to do this comes from ~30 years of sector-specific proprietary intelligence and the freedom to independently originate and advise on customised Mergers & Acquisitions, Growth Capital and Special Situation solutions.
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