Boston Consulting

CIOs: Take the "Pepsi Challenge"

October 16, 2009: 11:00 AM ET

Mergers are hot again: Is your tech team prepared for post-deal integration?

By Jim Milde, executive vice president, Keane Inc.

Milde says IT can drive operational excellence. Photo: Keane

Milde says IT can drive operational excellence. Photo: Keane

History shows that M&A deals during downturns yield better results. Boston Consulting, which analyzed over 400,000 deals from 1981 to 2008, recently concluded that "downturn deals create 14.5% more value for shareholders of the acquirer" than deals done during upturns. And they're twice as likely to produce long-term returns of more than 50%.

That's good news for companies that act now, especially if they are able to successfully execute complex business - and information technology integrations - to support their goals.

PepsiCo's (PEP) $7.8 billion acquisition of its anchor bottling operations, announced in August, is a prime example of a company changing its business model in an effort to get more efficient and better serve customers. How? If done correctly, the acquisition will eliminate redundant support functions and streamline sales, marketing and supply chain operations. More

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