As M&A emerges from quarantine, Deloitte (December, 2020) provides a solid data update about M&A during and after the pandemic. Some results are not that surprising - for example, from the economic crises of the last 30 years, we know that:
a) a surprise externality causes M&A activity to go on hold in the short-term
b) M&A demand comes back stronger in the aftermath to release pent up demand
c) crisis for one means opportunity for another
Yet the article builds into a most interesting read indeed. First, Deloitte nicely explains the M&A pathways to move from recovering to changing the game. Second, we have rarely seen this much attention paid to JVs and alliances as part of the deal equation since the mega-JVs of the 1970s. The fact that partnerships get so much attention in an M&A review proves that partnership-based business models are core part of any long-term strategy, across sectors.
We remain somewhat disappointed that Deloitte perpetuates a commonly-held misapprehension that doing a partnering deal is just like doing another merger or acquisition. While partnerships are often identified by the same business development team, the success factors required around strategy, culture, due diligence, trust building negotiations, launch and transfer to an alliance management team are fundamentally different.
Orchestrating value creation with, giving value to and extracting value from (in that order) an external partner or group of partners through deal-making and especially after the deal is done requires internal resourcing, capabilities and a technology infrastructure that is fundamentally different from integrating and redirecting people, technology and value from a merger or acquisition. Making an alliance is the sprint - making it work is the marathon.
That aside, this article remains an important read for any CXO, Head of Strategy, Head of Corporate Development and Head of Alliance Management.
Our lesson for Heads of Alliance Management: push hard to involve your team early in your company’s partnering deals!
Talk to us about how allianceboard can help you manage your ecosystem, platform or alliance portfolio.