SMT Magazine

SMT-May2017

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12 SMT Magazine • May 2017 Recently, I was interviewed in my capacity as a tenured corporate director of public com- panies by Corporate Board Member magazine of New York Stock Exchange's Governance Servic- es, on the following subject: "Does M&A Bear Fruit?" Therefore, I took the opportunity to sit back and reflect on my hands-on experience as well as observations on mergers and acquisi- tions in the corporate world. In this article, in- stead of covering both M and A, I am jotting down my thoughts in summation on the acqui- sitions part of M&A. Globalization has propelled acquisitions, and acquisition activities have fueled global- ization. For the last two decades, a plethora of megadeals and various sizes of acquisitions have been transacted; some are deemed fabu- lously successful, but a significant share of deals are subpar, at best, to the desired results—if not a total disappointment. Acquisition is an effective tool for a compa- ny's growth as a part of corporate growth strat- egy; and it is one of the top fiduciary duties of a company board's governance oversight. It is highly recognized that it could be faster and/or more economical to buy something than grow it organically. However, statistically, the acqui- sition failure rate is quite high. The often targeted "synergy" has been an overstated reason for acquisition. Achieving synergy is easier said than done. As Warren Buf- fett puts it in Berkshire Hathaway's 2017 Annu- al Report, "...As is in marriage, business acqui- sitions often deliver surprises after the I do's." Therefore, how to maximize payoff and miti- gate potential failure should be on the mind of every business decision maker. To deliberate the plausible questions be- fore initiating an acquisition should be a pre- requisite. Questions include: What are the es- sential elements an acquisition needs to have in order to be successful in the long term? What questions should directors ask manage- ment to ensure a deal is a good decision? How by Dr. Jennie S. Hwang H-TECHNOLOGIES GROUP SMT PROSPECTS & PE RSPECTIVES

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