Analysis result : string of pearls approach increases value
Combining a high deal frequency with a low deal volume , the string of pearls approach shows the highest TSR of all four defined strategic groups .
M & A STRATEGIC GROUPS 1 AND TSR
|
Examples CRODA SIKA
AKZONOBEL SOLVAY CLARIANT
|
15.7 % |
1 |
DEAL FREQUENCY : HIGH |
Examples |
BASF |
EVONIK |
LANXESS |
LONZA |
DUPONT |
BAYER |
|
Companies following a string of pearls approach ( high frequency and low volume ) show highest avg . annual TSR
STRING OF PEARLS
4.8 %
LARGE-SCALE M & A
DEAL VOLUME : HIGH
|
10.9 % |
|
8.1 % |
|
|
Examples
STEPAN
EASTMAN
|
SELECTIVE M & A
1
|
DEAL FREQUENCY : LOW |
ALL-IN |
Examples ASHLAND
HUNTSMAN ELEMENTIS
|
[ 1 ] About 290 investment deals considered between 2016 and 2021 . Strategic groups defined by deal frequency and deal volume : String of pearls (> 2 deals / yr . and < € 200M deal volume ); large-scale M & A (> 2 deals / yr . and > € 200M deal volume ); selective M & A (< 2 deals / yr . and <€ 200M deal volume ); all-in (< 2 deals / yr . and > € 200M deal volume ) Source : goetzpartners
8