The financial crisis of 2007-2009 has driven consolidation in the banking industry and created unique buying opportunities and risks. The current crisis differs from previous crises in a number of important ways. These differences include changes in accounting rules, the level of government assistance in deals, the diversity of assets and the nature of the businesses affected, and the role of private equity firms. In order to capitalize on current market conditions, investors and acquirers will need a different “playbook” and skill set than in the past.
Hastily planned and executed transactions in the current environment may create considerable short- and long-term risks for acquirers and investors. Research shows there is a close connection between merger success and early completion of integration activities—at the same time, acquirers and investors must balance the need for thorough planning and due diligence with the need to execute quickly.