Manufacturing Execs Rank People Issues Top Factors for M&A Success

October 4, 2007 ( - The latest Manufacturing Barometer from PricewaterhouseCoopers (PwC) found senior executives rank their ability to address people issues and the integration work after the deal are the two most important factors for M&A success.

Eighty-four percent of respondents ranked people issues as extremely or very important, while integration was seen as a top priority in the M&A process by 80% of those surveyed, according to a summary of the Barometer findings. Pre-merger activities are also an important challenge, as 74% of respondents ranked financial due diligence as an important factor and 72% chose getting sound strategic advice during the M&A screening process.

Senior executives ranked Sarbanes-Oxley compliance at newly acquired entities as a lower concern than in previous surveys, PwC said. Sixty-six percent of respondents listed it as only somewhat important or not important, while 21% ranked it as extremely or very important.

Structuring of working capital adjustments and preparing for a divestiture were cited by 44% of respondents as important for a successful M&A deal and addressing accounting and SEC issues that arise during a transaction was cited by 38%.

Fifty-six percent of manufacturers included in the survey reported involvement in M&A activity and related transactions (e.g., joint ventures, alliances) during 2006. Sixty-four percent said they expected to participate in similar or related activity by the end of 2007.

The survey found a growing interest in foreign markets, as 26% of respondents reported plans for M&A in Asia and 13% in Latin America – both sizeable jumps from 2006, PwC said. Plans for deals in Europe show little change from 2006, with only a 2% increase to 15%.

The Manufacturing Barometer report can be accessed from here .