A few years ago, the journey from announcing a merger or acquisition (M&A) to closing the deal followed a relatively predictable trajectory. Legal teams specializing in antitrust laws generally had a clear sense of potential regulatory hurdles and remediation measures needed to resolve them. In many cases, mega-deals took about nine months to secure final approval from regulatory authorities, and some transactions even concluded within 45 days without requiring additional information from regulators. Sub-threshold deals under the Hart-Scott-Rodino (HSR) Act often closed in just a few weeks.

A New Era of Complexity

Fast forward to today, and M&A deal timelines have grown significantly longer and more unpredictable. The culprits? Volatile geopolitical and macroeconomic conditions, coupled with increasingly stringent regulatory scrutiny. The heightened complexity of navigating the regulatory landscape has added unprecedented delays. Cross-border transactions involving jurisdictions like China are increasingly challenging, and the tech industry remains a primary focus for regulators on both sides of the Atlantic.

One prominent example is the Microsoft-Activision Blizzard deal, which highlighted the growing influence of the UK’s Competition and Markets Authority (CMA) as a critical player alongside the U.S. Department of Justice (DOJ), the Federal Trade Commission (FTC), and the European Commission (EC). These agencies are broadening their definitions of anti-competitive behavior, scrutinizing potential future competition and vertical integrations. Additionally, remediation requests from regulators now vary significantly across regions, making it harder to coordinate compliance strategies.

Collectively, these factors have created an M&A environment where deals frequently face delays of 12 to 24 months post-announcement. Despite this, dealmaking persists: in Q1 2024, global M&A activity rebounded by 30% year-over-year, totaling $755 billion, according to Refinitiv. However, this figure still lags behind the $1 trillion quarters seen during the 2020-2021 boom. Companies now face protracted timelines and must be prepared for a contested and extended process requiring greater strategic resilience.

New Risks with Prolonged Timelines

The extended timeline introduces a new set of risks that were less pronounced in faster-closing deals. Traditionally, rapid integration planning and execution were essential for realizing synergies and maximizing value from Day 1. Today, however, protracted timelines force companies to carefully balance the intensity and timing of their planning efforts.

Resource Allocation Risks: Initiating extensive planning efforts too early could waste resources if a deal ultimately falls through. On the flip side, deferring planning too long can lead to delays in value realization and operational chaos post-close.

Workforce Challenges: Prolonged uncertainty may destabilize the workforce, leading to reduced morale and potential attrition. Employees tasked with double duties during integration planning could face burnout over extended timelines.

Regulatory Pitfalls: Missteps in pre-close activities could attract additional regulatory scrutiny. Historically routine activities may now be viewed as premature integration, leading to compliance risks.

Principles for Managing Extended M&A Timelines

Given the challenges, postponing integration planning until regulatory approval is no longer a viable strategy. Companies must find a balanced approach to manage extended timelines effectively. Here are four principles to navigate this environment:

Generative AI in Action: Transforming M&A Planning

According to a recent study by McKinsey, companies leveraging AI in M&A activities reported a 20-30% reduction in planning timelines and a 15% increase in synergy realization. Generative AI tools are particularly impactful in areas like contract analysis, regulatory compliance mapping, and workforce transition planning. For example, by using AI to analyze contracts, companies can quickly identify potential risks, reducing the legal review process by up to 50%.

Preparing for the Future of Dealmaking

As M&A timelines grow longer and more complex, companies must adapt their strategies to stay competitive. Success in this evolving landscape requires:

Early and adaptive planning frameworks.

Strong governance structures that accommodate extended timelines. .

Strategic deployment of technology, including generative AI, to enhance efficiency. .

Clear communication with stakeholders to maintain workforce morale and investor confidence. .

While the current dealmaking environment presents significant challenges, it also offers opportunities for companies to differentiate themselves through strategic foresight and innovation. By adopting these principles, businesses can navigate the extended M&A timeline with confidence, turning potential obstacles into pathways for growth and value creation.