Acquisitions & Disposals consulting

Ares & Co is a consulting firm in Acquisitions & Disposals for General Management of Financial Services: Due Diligence, Acquisition, Optimisation and restructuring, Disposal and securitisation

Context
Challenges
Our expertise
Assignments

Context of consulting in Acquisitions & Disposals

The European Financial Services sector is increasingly characterised by a low interest rate environment, a low growth rate and an increasingly limited return on assets due to regulatory standards. Furthermore, the level of liquidity has probably never been so high given, in particular, the ECB’s accommodating monetary policy over the past ten years.

For firms within the sector, this means that expected organic growth is becoming more limited, pressures on their cost structure is increasing and the profitability of certain asset segments is no longer attractive enough. It is therefore not surprising to find a dynamic M&A market, focused on gaining growth points and market share, strengthening competitiveness and reducing costs by attaining critical size and conducting asset portfolio rotations with a view to optimisation.

Challenges of consulting in Acquisitions & Disposals

In our experience, most external growth transactions fail to create value. Five major issues must be resolved before the deal itself:

Lack of clear strategy: weak industrial project, over-confidence in the capacity of the buyer
Inadequate fit: overly superficial analysis, lack of rigour in assessing synergies and how to achieve them
Overvaluation of the target: overly optimistic financial modelling
Limited negotiation techniques: lack of preparation, lack of understanding of what is negotiable or not, poorly understood human context, fear of saying no
Lack of a real integration plan: too vague, without a system for measuring synergies, cultural differences not sufficiently taken into account