The Institute puts this next to the pessimistic works deliberately, because an owner deserves the strongest version of both cases before deciding. What appears to have changed is not luck but practice. Acquiring became a repeatable corporate capability rather than an occasional adventure, which is the same finding the McKinsey programmatic research on this shelf reaches from a different direction. Bain’s companion brief puts a number on the gap: frequent acquirers earned fifty-seven percent higher shareholder returns than companies that stayed out of the market in the 2000s, and that advantage is now around one hundred and thirty percent.
Read the definition carefully before taking comfort. Success here means a deal met the objectives set for it, which is a fair test and a different test from whether the business was still owned ten years later. Note also who is being measured: serial corporate acquirers with dedicated capability, not an owner doing one deal. If anything the finding argues that occasional acquirers should be more careful, since the improvement belongs to the practiced.
The authors also observe that even among the roughly thirty percent that went less well, many still created some value, which is a more textured picture than the binary the old statistic implied. The free Bain brief carrying the same research is at bain.com and is worth reading if the article is behind a paywall.
Directly against the MIT Sloan work added alongside it, which finds forty-six percent of deals eventually undone over a ten-year average. Also worth holding against Damodaran and Sirower on this shelf, whose case is about overpayment rather than execution, and which improved practice does not answer.