Posted to BUSLIB-L by Anne Marsden on June 10, 2002

Where can I find information about the cost savings that result from mergers and acquisitions?

The average merger results in a 19 percent savings of the merged companies' combined IS budgets. Source: <http://www.cio.com/archive/031598_forrester.html>

We ran an analysis from January 1994 to February 1997 on (bank) acquisitions between $100 and $400 million. The average savings was 30%. Source: <http://www.banking.com/aba/feature1_0497.htm>
<http://www.frbsf.org/econrsrch/wklyltr/wklyltr99/el99-25.html>

On average, merged banks cut annual total noninterest expense by 0.04%. So, for a merged bank that earns, say, a 1% return on assets (ROA), these average cost savings translate into a 4% increase in ROA. Source: <http://www.frbsf.org/econrsrch/wklyltr/wklyltr99/el99-25.html>

Of the companies in the survey, 30% created value as a result of the transaction.
Source:
<http://www.kpmg.com/Rut2000_prod/Documents/9/KPMG_MA_2001_web_new.pdf>

Estimated DoD Cost Premium/Potential Cost Savings (%) (See Table 2.1 on page 12)
Source: <http://www.rand.org/publications/MR/MR1329/MR1329.ch2.pdf>

The Integration Game
http://www.redherring.com/mag/issue80/mag-integration-80.html

See also from the McKinsey quarterly (requires registration)

Learning From Hi-Tech Deals

Why Mergers Fail

Since my customer wasn't very picky about where the numbers came from, I also have some one-line excerpts from 11 articles with "% cost savings" information. Since it is rather long, I'd be happy to send anyone a separate e-mail with this additional information. Just let me know!