2023 M&A Barometer: Deal trends and issues

Economic instability is the number one issue driving companies to review their strategy

• Top 3 factors impacting deals
• 50% economic instability
• 42% technology/automation
• 28% ESG

3 biggest deal integration challenges:

• Integrating cultures: 68%
• Integrating technology & data: 53%
• Limited internal resources: 35%

Total rewards challenges include:

• 30% integrating job architecture
• 30% integrating compensation packages
• 35% limiting benefits

All eyes are on key talent

• 75% of organizations say retention of key talent is the top metric to determine integration success post-acquisition
• 73% say it’s challenging to retain high-skill employees
• 54% say formal change leadership training and support programs are an emerging focus

What’s on the horizon?

Assessing targets: Emerging areas of focus when it comes to DEI and ESG

• 42% say examining pay equity 
• 50% say reviewing climate policies 
• 53% say reviewing ESG policies/ratings 

Optimizing integration: Emerging areas of focus when it comes to M&A HR playbooks

• 29% say accessing their M&A HR playbook via an online platform 
• 35% say training HR team members on how to use their M&A HR playbook effectively 
• (note: emerging focus means “planned” or “considering”)

After acquisitions, JVs and partnerships are a key plank of M&A strategy

• 50% respondents are looking at joint ventures/partnerships and 2 in 5 are looking at divestitures/spinoffs in the next 3 years (a double-digit increase since 2022)
• 67% of organizations use human capital-related transition service agreements when spinning off a business

Private equity brings its own set of challenges

• 67% of organizations say buying from private equity can involve significant executive compensation and retention challenges
• 57% say selling to private equity is harder than selling to a strategic buyer

What to do now?

• Implement best-in-class project management leadership, tools and practices to drive thoughtful and well-planned integrations
• Leverage a cultural assessment framework to gain early insights into the target’s “secret sauce” and potential culture integration risks
• Embrace change leadership training for your own leaders and those at the target so they are better equipped to guide the combined organization through the transition
• Employ proven financial and non-financial retention measures to retain and engage key talent