Monday, September 20, 2010

Report Released on Financial Advantages of Mergers

I normally focus this blog exclusively on college and university mergers within the United States, but wanted to share an interesting report recently released in the United Kingdom. There tends to be much debate as to financial advantages of mergers, with efficiencies frequently listed as a top reason for considering a merger by proponents. Historically, there has been little to no conclusive research to show that financial efficiencies have been realized due to university mergers.

PricewaterhouseCoopers suggests that mergers and collaboration "offer UK universities a financial lifeline" and must be considered in this economy. The report continues to offer a "how to" for successfully implementing a merger.

In the end, financial benefits of mergers are difficult to prove, at best, through post-merger analysis. University merger experts James Martin and James E. Samels suggest that if considering a merger for financial reasons alone, it is being considered for the wrong reason. Mergers should be considered for mutual growth, for two institutions to become stronger together than apart. Whatever financial efficiencies result in the end are an added benefit.

The full report is available online here.