Deal Fever – When M&A Gets Ahead of Itself
Every so often, a headline announces a major acquisition. A listed company is buying another for a hefty premium. The logic seems sound—market share, complementary offerings, geographic expansion. The press release is confident. The CEO sounds upbeat. Analysts weigh in.
But sometimes, just sometimes, it all starts to feel a little too enthusiastic. The valuation looks stretched. The synergy story is bold. And the rationale begins to sound more like a sales pitch than a sober assessment. That’s when you start to wonder: is this another case of deal fever?
It’s a pattern that plays out occasionally in the public markets. From the outside, we can’t see the inner workings of the boardroom, but certain familiar signs tend to emerge. Over the years, you notice how deal momentum builds—first with market excitement, then with carefully crafted narratives. The deal is positioned as transformative. Integration is expected to be smooth. Returns are projected to be strong. All within an impressively short timeframe.
There’s nothing wrong with confidence. But in some cases, you can’t help but notice how valuation multiples edge higher than expected, or how synergy estimates are ambitious without much detail. It becomes difficult to tell whether the projections are driven by evidence or by the desire to make the deal work.
This isn’t about judging any particular company or deal. It’s simply an observation: when momentum gathers around an acquisition, objectivity can become harder to maintain. Especially when markets are buoyant, and when multiple parties are competing for the same target, it’s easy to see how discipline might give way to urgency.
From the outside, of course, we never see the full picture. We don’t know the internal discussions, the pushback, the debates. What we do see are the assumptions that make it into the public model, the price tag that’s announced, and the narrative that supports it.
Then, months or even years later, the post-deal reality starts to emerge. Integration challenges surface. Growth may take longer than expected. Occasionally, impairments follow. And with hindsight, questions are raised about whether the initial excitement was perhaps a little too optimistic.
Deal fever, then, is not about reckless decision-making. It’s about how, in competitive and high-pressure environments, even well-intentioned plans can become stretched by the psychology of the moment.
For those of us watching from the outside, it’s a useful reminder: valuation is as much about discipline as it is about vision. The most impressive deals often aren’t the loudest—they’re the ones that stay grounded, even when the story is compelling.