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16 October, 2011
Creating growth through M&A is being stifled by a lack of joined up thinking in M&A processes

  • New global study by Eversheds reveals that deal due diligence does not focus enough on post deal integration
  • Little or no focus beyond the deal transaction to post-integration is compromising the benefits and value of cross-border M&A
  • Internal processes are as much to blame as external factors

Global businesses are not realizing the full potential of cross-border mergers and acquisitions (M&A) as a means of driving growth due to weaknesses in the deal process. A new global study, The M&A Blueprint: Inception to Integration, published today by global law firm Eversheds, shows that deal teams need a more holistic approach and stronger connections between the planning, completion and post-deal integration phases.

The study involved more than 400 multi-national businesses* who have worked on cross-border M&A deals in the past three years. It shows that nearly half (43%) of businesses believe that the most common cause for deals not successfully achieving their goals is due to a failure to address post deal integration from the early stages of deal due diligence.

The report also shows that legal risk is an increasingly important consideration in the assessment of potential deals. General Counsel provide essential input at this stage and more than half (59%) of all respondents said they had spotted potentially damaging issues early enough to caution management about proceeding with the deal.

The research highlights that less experienced buyers are finding the process challenging but even those with a wealth of knowledge believe that there are improvements to be made.

Mihai Guia, Managing Partner at Eversheds Lina & Guia, said:

"Essentially, this report came to confirm what our lawyers already noticed during the numerous M&A cross-border transactions in which we were involved. Very often the expertize of Eversheds Lina & Guia was requested in an advance state of the transactions and, unfortunately for our clients, the setbacks caused by the lack of due diligence were either very difficult to amend, or could not be overcome at all, thus causing a prejudice not anticipated during the initial analysis phase of the transaction.

We customary recommend to all our clients to have a holistic approach regarding M&A deals and underline the fact that cutting back on certain initial expenses related to due diligence may lead to failure of potentially very successful transactions."

The M&A Blueprint: Inception to Integration report sets out the blueprint for success in cross-border deals as identified by deal-makers themselves:

1. Inception

  • From the start - 38% of deals where the in-house team were brought in too late suffered problems during integration.
  • Early warning - 59% of all respondents said they had spotted potentially damaging issues early enough to advise that a deal should not go ahead.

2. Planning and due diligence.

  • The crucial stage - 43% said the most common cause of the failure to realise value in transactions was down to avoidable errors in the due diligence and planning phase.
  • Joined up thinking - 70% felt that linking due diligence and integration planning together would help to improve the deal process.

3. Deal execution

  • What matters most - The reasons General Counsel would advise not to proceed with a deal were illegality/regulatory (45%), e.g. bribery, competition and antitrust, and commercial concerns (45%), e.g. price and valuation, litigation risk, integration costs.

4. Integration

  • A false saving? - 83% did not use external lawyers to a large degree during integration, although they were acknowledged to add value. The main reason for this was cost.
  • Avoid mismatches - 26% felt that the failure to realize value in a recent cross-border M&A deal was due to a misalignment between legal dealmakers and the day to day business team.

The report also found that companies are two and half times more likely to have faced problems with integration if the in-house legal teams were involved late in the process. This is particularly true for those who are less experienced in the deal process, with the report showing that businesses whose in-house legal teams had worked on less than ten cross-border deals over the past two years were more likely to face problems in the integration phase.

Additionally, the report reveals that legal advice, both internal and external, is currently brought in too late and not at a strategic level. Appropriate proper legal advice at every stage in the deal cycle is critical to the success of M&A transactions.

The full report can be requested by sending us an e-mail at office@eversheds.ro.

3 October, 2011
Lina & Guia's affiliation to Eversheds International: a new step towards seamless international services

Bucharest - London, October 3rd - Lina & Guia, one of Romania's top law firms, has today announced its association with the international law firm Eversheds. Immediately after obtaining the approval of the Bucharest Bar, Lina & Guia will operate under the name Eversheds Lina & Guia.

Lina & Guia is a well-established Romanian full service law firm, boasting a prestigious track record and an impressive client portfolio, including Danone, Cosmote, GlaxoSmithKline, Tyco, Sigma Bleyzer, RBS, Medicover and Volvo. The firm's areas of expertise range from M&A, Commercial and real Estate, to Energy & Projects, Banking, Employment, Telecommunications, Antitrust, Dispute Resolution and Insolvency.

Lina & Guia is an energetic, fast-paced and enterprising legal practice committed to providing the highest level of quality in legal services in Romania. Working at large-firm standards and being able to undertake complex work, coupled with small-firm client care and attention to detail, Lina & Guia now marks another era in its evolution.

Eversheds International is a top-ranking global London based law firm with 46 offices world-wide. Its continuing expansion speaks of a better understanding of local markets and legal contexts, dedicated to offering impeccable services.

Mihai Guia, managing partner of Lina & Guia said: "Our collaboration with such a prestigious global law firm will enable us to provide our clients with seamless international service and, in return, we will be able to share our local knowledge of the Romanian market and this region with our new colleagues overseas. We share the same perspective, to be committed locally but to operate as one firm globally."

"We are proud to collaborate with such a strong and highly reputed law firm. This is a crucial milestone in our evolution and we will continue to uphold the highest of standards, now benefitting from a wider global perspective," Cristian Lina, managing partner of Lina & Guia, declared.

Bryan Hughes, Chief Executive of Eversheds LLP said: "Lina & Guia has an exceptional reputation for its ability to undertake complex work, coupled with a high standard of client service. The Romanian market is a critical hub for the Central and Eastern European market and has strong growth potential as well as being a strong trade partner with Russia."

July 2011
Romanian Society for Developmental Biology

Lina & Guia is proud to announce its collaboration with the recently established Romanian Society for Developmental Biology (RSDB), a non-profit organization that aims at providing a forum for the best Romanian scientists, RSDB irrespective of their country of residence or affiliation, working in the field of stem cells and developmental biology at large. RSDB aims at strengthening the Romanian scientific community in these areas, building on the local tradition of the field and the experience of young investigators, both abroad and working in the country.

"This is one of the fastest-growing disciplines in biology and science in general," says Dr Octavian Voiculescu, of Cambridge University, the body's acting President, who added that the organization "will seek to elucidate fundamental aspects of living matter organisation, and their application at the frontier of modern medicine."

Adrian Iordache, the Partner who has helped with the project set-up, stressed the firm's continuing commitment to pro-bono work for worthwhile causes. "It is our way of giving back to the community" said Mr Iordache, who added that "We are confident that RSDB will be a hub for Romanian scientific excellence and we are particularly pleased to be able to contribute, with our own expertise, to the visionary efforts of some best Romanian researchers in the field."

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