5 Strategies to Increase Shareholder Value in M&A Transactions

Amidst the current economic landscape and the challenges posed by high capital costs and macroeconomic uncertainties, a significant number of global chief executive officers (CEOs) are optimistic about the resurgence of mergers and acquisitions (M&A) in 2025. However, to maximize value creation and enhance total shareholder return (TSR), businesses must consider reshaping their enterprise strategy to chart a new course.

At the core of any successful M&A endeavor lies the enterprise strategy of a company. While business schools instill the basics of strategy, it is the CEO and the board who drive the enterprise strategy forward to facilitate transformative changes, leveraging various pillars, programs, and initiatives to bolster TSR. Yet, there are often misalignments within organizations, both vertically and horizontally, that hinder successful execution of the enterprise strategy.

Drawing from extensive experience working on numerous M&A deals, it is evident that there are five key actions that deal teams can implement to enhance their outcomes:

1. Developing a robust strategic gameplan.
2. Allocating capital in alignment with the enterprise strategy and supported by data.
3. Leveraging artificial intelligence (AI) for a competitive edge.
4. Harnessing the expertise of the deal team.
5. Early communication of the deal thesis.

Establishing a strong strategic gameplan is essential for organizations looking to drive growth through both organic and inorganic means. This plan should serve as a guiding beacon for decision-making, particularly when evaluating potential M&A opportunities that may come their way. Additionally, allocating capital based on the enterprise strategy, underpinned by data analysis, is crucial in ensuring sound investments that align with the organization’s overall objectives.

In the realm of deal sourcing, organizations that continuously cultivate a pipeline of potential targets are better positioned for success. While maintaining relationships with investment banks can be advantageous, leveraging internal business knowledge to identify targets early on can be highly beneficial. Moreover, the integration of AI tools in the deal process can streamline operations by analyzing market trends, identifying targets, and facilitating due diligence.

Tapping into the collective expertise of the deal team and advisors is another critical component of successful deal execution. From formulating transaction strategies to navigating negotiations, the insight and knowledge of the team can contribute significantly to the deal’s success. Furthermore, effective communication of the deal thesis early on allows stakeholders to align on value drivers, integration strategies, and resource allocation, paving the way for a smoother post-deal integration process.

By proactively implementing these strategic actions during the M&A lifecycle, organizations can effectively execute their M&A strategies in line with their enterprise objectives, driving value creation and bolstering TSR. Delaying these crucial steps risks impeding value realization and post-transaction success. It is imperative for companies to prioritize these actions to seize opportunities for growth and maximize shareholder value in the dynamic landscape of M&A deals.