Past surveys by us have found that close to 70% of top executives considered past M&A deals by Japanese companies to be failures. The most common reasons were “wrong choice of target” and “integration failure after the acquisition”. Executives who admitted to failure said they considered due diligence to be least important in an M&A transaction.

Target selection is certainly the most important process of an M&A strategy. The question is whether these companies were able to make the decision to discontinue the transaction based on the judgment that “the target company was not a strategic fit” during the M&A execution process. The major cause of failure could be the lack of verification of the most critical issues during the due diligence process.

G-FAS provides a comprehensive enterprise review service called “Business Review”, which aims to thoroughly investigate the condition of the target company, breaking the boundaries of a traditional accounting due diligence (i.e. only examining the content of the balance sheet and income statement), and flushing out all risks associated with the investment. Through this approach, we can provide a comprehensive due diligence service which includes risk analysis on the effect of goodwill impairment as well as information for evaluating the suitability of the acquisition and management information useful for post acquisition integration.