Revenue Synergies: An imperative in CPG deals

Cost synergies: Important but exhausted

Reducing costs and driving efficiency isn’t enough to support the high multiples being paid.

Tried and true cost synergies have successfully boosted multiples, and with the additional tactics discussed in our paper "Winning in M&A:  Best practices from leading consumer companies,” organizations have the opportunity to drive as much value as possible by:

• Announcing the details of synergy expectations and plans before the transaction close;
• Publicly tracking and reporting synergy progress post acquisition; and
• Capturing a significant portion of synergies quickly, usually within the first year.

The challenge of creating value from M&A remains, and the benefits of these tactics applied to cost takeout hold true. But in the current environment, transactions must be accretive to the new parent company in order to support continued high multiples in the consumer and retail space.