Why Value Creation Should Be the North Star of Every Transaction
Every transaction begins with ambition to either raise capital, acquire a business, enter a new market, restructure for growth, or prepare for an exit. But the real test of any transaction is not the announcement. It is whether the transaction creates sustainable value after the papers are signed. For boards, founders, investors, lenders, and management teams, value creation should be the North Star because it keeps the deal focused on what matters most: stronger cash flows, better margins, clearer strategy, improved risk management, and a more valuable business.
The Evidence Is Clear
Figure 1: Transaction value-creation evidence summary.
What the evidence shows
Figure
Why it matters for value creation
Global M&A deal value (2025)
About US$4.8 trillion
Large amounts of capital are committed to deals, so even small errors in strategy, valuation, or execution can destroy significant value.
Estimated M&A failure rate
70%–90%
Most deals need more than enthusiasm; they require a clear value-creation thesis and disciplined execution.
Large announced M&A deals cancelled each year
About 10%
Value-creation, regulatory, and political issues can stop deals before closing.
Due diligence not giving an adequate synergy roadmap
42%
Traditional due diligence may miss practical steps needed to capture synergies and protect returns.
Source: Bain & Company (2025 deal value), Harvard Business School/HBR, and McKinsey & Company.
Deals can create powerful outcomes, but the evidence shows that many do not. Global M&A activity is enormous—deal value reached about US$4.8 trillion in 2025, the second-highest annual total on record according to Bain & Company, while the M&A failure rate is still often estimated at 70% to 90%, with a 2024 study of 40,000 deals finding roughly 70%–75% fail. McKinsey also reported that roughly 70% of mergers fail, and that pre-deal due diligence failed to provide an adequate roadmap for capturing synergies and creating value in 42% of cases. The lesson is simple: a completed transaction is not automatically a successful transaction.
Value Creation Starts Before the Deal
The first question should not be, “Can we do this deal?” It should be, “Why should we do this deal, and how will it create value?” A strong value-creation thesis explains how the transaction will improve the business. It may include revenue growth, cost savings, better working capital, stronger margins, access to new markets, improved governance, or more efficient capital allocation.
This is where rigorous advisory support matters. A good financial model should not only show attractive numbers; it should tell a clear commercial story. A good valuation should not only estimate price; it should test risk, assumptions, and return expectations. A good due diligence process should not only identify issues; it should help decision-makers understand what must happen to protect and unlock value.
Discipline Protects Value
Many transactions fail because decision-makers fall in love with the asset and lose discipline on price, structure, or timing. If a buyer overpays, value can be destroyed even when the business performs well. That is why every deal needs realistic assumptions, sensitivity analysis, downside cases, and clear walk-away points.
Value also depends on execution. Integration, reporting, governance, funding, cash management, and stakeholder communication must be planned early. Leonine’s client-centred approach is designed around this discipline: helping businesses translate strategy into numbers, numbers into decisions, and decisions into outcomes.
The Best Deals Balance Strategy and Finance
A transaction may look strategically attractive but fail financially. It may also appear financially cheap but distract management from the company’s real priorities. The best deals pass both tests. They fit the company’s long-term direction and generate acceptable returns after considering risk, capital employed, funding structure, and execution costs.
Figure 2: Selected value-creating transactions, including global and Nigeria-relevant examples.
Company/Buyer
Target
Transaction Year
Transaction Type
Amount
Disney
Pixar
2006
Acquisition
US$7.4 billion
Disney
Marvel Entertainment
2009
Acquisition
Approximately US$4 billion
Android Inc.
2005
Acquisition
Reportedly about US$50 million
Renaissance consortium
SPDC onshore assets
2024
Acquisition
US$2.4 billion
Seplat Energy
Mobil Producing Nigeria Unlimited assets
2024
Acquisition
US$800 million
Oando
Nigerian Agip Oil Company
2024
Acquisition
US$783 million
Source: The Walt Disney Company press releases for Pixar and Marvel; public reports on Google’s Android acquisition; BusinessDay, Leadership, and Nairametrics reporting on major Nigerian and Africa-relevant transactions.
Successful deals show what this balance looks like in practice. Disney’s US$7.4 billion acquisition of Pixar (2006) preserved Pixar’s creative leadership and culture while using Disney’s distribution to scale its intellectual property. Disney’s US$4 billion purchase of Marvel (2009) followed the same discipline—retaining Marvel’s creative leadership while adding studio support—and the resulting franchise has generated more than US$30 billion at the global box office. Google’s roughly US$50 million acquisition of Android (2005) is often cited as one of the highest-return deals ever, securing a mobile operating system early and capturing dominant smartphone share. In each case the strategic logic was clear, the price was disciplined, and integration protected rather than destroyed the value that made the target attractive.
This is why value creation is a practical North Star. It connects boardroom ambition to financial evidence. It connects investor expectations to operational realities. Most importantly, it helps companies avoid transactions that look good on paper but fail in practice.
Conclusion and Call to Action
Every transaction should begin and end with one question: how will this create sustainable value? Deals that ignore this question often become expensive announcements. Deals that answer it clearly can become engines of growth, resilience, and competitive advantage.
Before your next capital raise, acquisition, valuation, restructuring, or strategic transaction, insist on a clear value-creation thesis, disciplined analysis, and a practical execution plan. Leonine Investment Services Limited helps businesses do exactly that—bringing financial rigour, market understanding, and tailored advisory support to help clients maximise value.
References
- Harvard Business School / Harvard Business Review, “The New M&A Playbook”
- Harvard Business Publishing Education, “The New M&A Playbook”
- McKinsey & Company, “Done deal? Why many large transactions fail to cross the finish line”
- McKinsey & Company, “A McKinsey perspective on creating transformational value from mergers”
- McKinsey & Company, “A McKinsey perspective on value creation and synergies”
- Bain & Company, “Global M&A stages great rebound in 2025 with $4.8 trillion deal value”
- Fortune, “We analyzed 40,000 M&A deals over 40 years. Here’s why 70-75% fail” (2024)v
- The Walt Disney Company, “Disney To Acquire Marvel Entertainment”
- Android Authority, “Google buys Android: All the facts and history you need to know”
- Shell Global, “Shell completes sale of SPDC to focus its portfolio in Nigeria on Deepwater and Integrated Gas positions”
- Seplat Energy, “Completion of the Acquisition of MPNU”
- Oando PLC, “Oando PLC completes US$783 million acquisition of Eni’s subsidiary, Nigerian Agip Oil Company”
- DealRoom, “Successful Acquisition Examples: Biggest M&A Deals”
- The Walt Disney Company, “Disney To Acquire Pixar”