M & As in new strategic areas show highest shareholder returns
Analysis of key market participants shows significant evidence of a strong correlation between a strategic- or portfolioenhancing M & A approach and value creation and total shareholder return .
Core business transformation
With respect to value propositions , technologies , and markets
No . of transactions
New business
Complementary business
Core business
ACQUISITIONS NEW STRATEGIC AREAS
ENHANCING M & A
CORE M & A
DIVESTMENTS
Short term
Average annual TSR 16.6 % 1
Average annual TSR 15.9 % 1
Average annual TSR n / a
Average annual TSR 1.5 % 1
Includes portfolioenhancing and footprintexpanding M & As
No company with a predominant focus on core M & As was identified
Includes valueunlocking , sub-segment , and other divestments
ALLIANCES AND PARTNERSHIPS
PARTNERING STRATEGIES
JOINT VENTURES
Time to sustainable value
VENTURE AND INCUBATING
IN-HOUSE BUSINESS MODEL INNOVATION
[ 1 ] Sixteen competitors analyzed concerning number and type of M & A transactions ( 2016 – 2021 ). Total of 291 transactions identified . Competitors grouped according to primary M & A type ; average annual TSR calculated for the group . Distribution among four groups : M & A in new strategic areas ( 1 / 16 ), portfolio-enhancing M & A ( 7 / 16 ), core M & A ( 0 / 16 ), value-unlocking divestments ( 8 / 16 ) Sources : Company websites , annual reports , Mergermarket , goetzpartners
Long term
5