Lessons for Tomorrow's Deals

Deck: 

Many Deals Completed, What Have We Learned?

Fortnightly Magazine - September 2016
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Over the last twenty years, the U.S. utility sector has gradually dwindled. The power sector shrunk by approximately sixty percent, from ninety-five to just under forty companies. The gas sector shrunk by an equivalent percent, from just over fifty companies to right at twenty.

Numerous other companies tried to consolidate, only to find that striking and concluding a deal is hard, notwithstanding the industrial logic that underpins the combination. Yet, this experience gained over the last two decades of consolidation activity has been a wise teacher to the industry.

Both successful and failed deals have been instructive to utility managements on whether and how to position a proposed transaction for pursuit and approval. These lessons from the front - whether related to competitive, value, regulatory or execution experiences - provide valuable insights to those companies considering their first combination. As well as to those companies pursuing further scale-up.

Successfully incorporating these lessons into future deal planning can help merging companies avoid both time delays and adverse outcomes.

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