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      This article distils findings from KPMG’s public company M&A research report The M&A Dance, translating them into recommendations for boards, CFOs and integration leaders.

      Between 2012 and 2022, KPMG professionals analysed 3,006 public‑to‑public deals above USD 100 million. After rigorous filtering, 682 completed transactions formed the statistical backbone of our research. Markets granted those acquirers an average +3.6 pp sector‑adjusted TSR uplift from 105 days before announcement to close — but reclaimed ‑7.4 pp over the next 20 months. The chart below shows how initial optimism often snaps back — ‘the TSR Boomerang’.

      The TSR Boomerang

      Average Acquirer sector adjusted TSR1

      The market pre-pays for synergies, miss your execution window and the TSR boomerang will come straight back.

      Barnaby Robson

      Partner

      KPMG China

      Executive Snapshot

      • Average sector-adjusted TSR:
        • Golden period (T–105 pre-Announcement to Deal Close): +3.6pp
        • Snap-back period (Deal Close to T+20 months): -7.4pp
      • Deals creating value at T+24 months: 42.8%

      The golden period: 105 days pre-announcement — Deal close

      Positive rumors, a compelling equity story and an arithmetically attractive premium can help to spark a run up in the acquirer’s TSR. Markets price in synergies they expect you to deliver. This is one of the few times capital markets give you credit for value creation before you prove it. Leverage this ~187-day window to:

      1. Lock the narrative — quantify synergy sources and risks, so the market’s expectations match your internal economics.
      2. Design the Day-1/100 value delivery engine — prioritize top-quartile value creation initiatives, name accountable leads, secure resources and developed detailed integration and value creation implementation plans.

      The Snap-Back: Close - T + 20 months

      Our research shows Legal Day‑1 is on average the start of the Snap‑Back period. Many acquirers experience a decline in TSR relative to their sector index — with an average 7.4pp decline in the two years following deal close.

      Factors such as poor planning, culture clash, operational disruption, unforeseen costs and integration fatigue can erode the uplift faster than synergies crystalise. Our analysis reveals that only 42.8% of deals generate value 24 months post-close.

      The complexity of merging two organizations can lead to delays in achieving anticipated synergies and operational efficiencies, sometimes taking up to 5 years to fully materialize. This delay and lack of reporting of synergy realization can result in waning market confidence, causing a drop in stock prices. This prompts urgent actions from the acquirer, leading to hasty decisions like premature workforce reductions, disruptions in the supply chain, and customer dissatisfaction, amplifying the decline in TSR.

      These operational hurdles pose challenges to the acquirer's performance and diminish investor trust, underscoring the critical importance of leveraging the golden period for effective integration preparation. It is imperative to prioritize robust planning and execution during the integration phase to mitigate these risks. Transparent communication regarding synergy progress post-deal closure is crucial in maintaining investor trust and safeguarding the acquirer’s TSR performance.

      Long term M&A value creation: Six winning attributes

      We summarize below the six key winning attributes that can enhance the likelihood of long-term value creation from M&A in our full report, The M&A Dance: Orchestrating Synergies and Value Creation in Public Company Acquisitions.

      • Strategic clarity

        Objectives anchored in a quantifiable value thesis.

      • Value-focused diligence

        Multi lens diligence (financial, commercial, ops, tech, people); early integration planning to capture value. 

      • Experienced deal teams

        Repeatable playbooks, cross border depth, decisive action, clear communication throughout the process.

      • Preparation discipline

        Integrated diligence that links to a Day 1/100 plan.

      • Rapid prioritized integration

        80 % of synergy value actions launched within 100 days.

      • Relentless execution & reporting

        Track synergy realization quarterly; communicate transparently.

      Regulatory spotlight

      Regulations vary by jurisdiction regarding what information can be disclosed about a public company transaction. The UK Takeover Code already mandates Quantified Financial Benefit Statements (QFBS) — a quantified statement of expected synergies from a proposed acquisition.

      International Accounting Standards Board (IASB) proposals will require a similar level of detailed synergy disclosure in IFRS 3 notes. If adopted, acquirers will have to publish quantified targets and progress metrics in their annual reports – bringing post-deal delivery under greater investor scrutiny.

      Read more

      This article is the second in a series translating the findings of The M&A Dance into bite sized insights for executives and boards. Next up: [“Measure for measure — weighing cash, stock and disclosure in Public M&A”].

      In our full report, The M&A Dance: Orchestrating Synergies and Value Creation in Public‑Company Acquisitions, our multivariate regression analysis across 11 hypotheses sets out the deal cohorts most likely to succeed and provides an overview of the key attributes of successful acquirers — from initial deal strategy through to post-deal value realization. Download the full report at The M&A Dance: Orchestrating Synergies and Value Creation in Public-Company Acquisitions.

      • Measurement of deal value: We assume movement in Total Shareholder Return (TSR) between relevant specified dates reflects the Net Present Value (NPV) of a deal. The implicit assumption is that the market’s reaction to a deal is a proxy for its true value. We also assume the below formula holds: 

                          NPV of a Deal = PV of Synergies - Purchase Premium

      • Adjusted TSR: We use an adjusted TSR, which adjusts for the change in the relevant sector index over the reference period. We believe this provides a more accurate and insightful assessment of M&A value creation by isolating the deal’s impact from broader market influences.
      • Deals dataset: We began with a total population of 3,006 public company to public company M&A deals globally, spanning the period of January 1, 2012, to December 31, 2022, sourced from S&P Capital IQ. After applying a set filters based on data availability, data consistency and outliers, our final sample consisted of 682 M&A deals. Market cap data was extracted as of 20 January 2025. Average acquirer sector adjusted TSR analysis included 590 out of 682 sample deals from the period 2013 to 2022, based on the deal close date. Only deals involving acquiring companies that remained publicly listed as of 20 January 2025 and were listed for 2 years before and after the deal close date were included. Sample deals involving targets that had not been listed for 2 years prior to the deal close date were excluded.

      The M&A Dance: Orchestrating synergies and value creation in public company acquisitions

      A decade of data driven insights into the choreography of successful M&A
      Read more

      Contact us

      Barnaby Robson

      Partner, Head of Value Creation, China, Head of Deal Strategy, Hong Kong, Head of Financial Services Deals, Hong Kong

      KPMG in China