HOW MUCH VALUE CREATION?(mergers and acquisitions do not produce shareholder value expected according to AT Kearney Inc.)(Brief Article)

Industry Week, January, 1999 by McClenahen, John S.

Merger missteps may shortchange shareholders.

Even as mergers and acquisitions (M&A) around the world continue to occur at a dizzying pace--Securities Data Co., Newark, N.J., calculates that through mid-December they totaled a stunning $1.6 trillion for 1998--there's reason to question whether the boom in business combinations is creating significant shareholder value.

Indeed, more than half of all corporate mergers fail to create substantial returns for shareholders, claims a recent study from AT. Kearney Inc., the Chicago-based management-consulting arm of Electronic Data Systems Corp.

Having examined 115 multibillion-dollar mergers in manufacturing, finance, utilities, and services in the U.S. and .13 other countries, Kearney determined...