Stage-by-stage advice from an M&A veteran.
William F. Hederman is the executive director of the Energy Resources Group at Morgan Lewis & Bockius LLP. Contact him at whederman@morganlewis.com.
Few things about the energy industry today are certain, but one sure bet is that industry mergers and acquisitions will continue. This restructuring may take the form either of acquisition or merger of an entire company, or it could entail the purchase or transfer of control of a set of specific assets (perhaps with relevant staff). The odds against success are high, if not overwhelming. At least one analysis estimates that less than half of major mergers outperform the relevant industry return to shareholders. Nevertheless, these combinations continue because the potential for superior returns is clear and attractive.
Leaders in the energy business have a great deal at stake in this latest wave of restructuring. Whether part of an acquiring team or of an acquired asset or business, one’s fiduciary responsibility is to find a way to succeed. Experience demonstrates that:
• Success is difficult.
• Success is possible.
• Certain measures improve the chances for success.
By taking a proactive approach to restructuring, and toward successful integration in particular, managers can enhance both the rewards to stakeholders and to their own careers.