M&A in Uncertainty: When Smaller Deals Win Big (Programmatic Approach)

Over the past decade, the environment in which companies operate has become steadily more complex. Rather than facing isolated disruptions, many have had to adapt to a combination of rising interest rates, evolving supply chains, geopolitical uncertainty, and faster technology cycles. Together, these factors have made volatility less of an exception and more of an ongoing condition.

In this context, M&A remains a key path to growth, but the margin for error is narrower. Large, high-stakes transactions are harder to execute and integrate, and the consequences of getting them wrong are more pronounced. As a result, the question for leaders is increasingly practical:

“How to continue growing through M&A without relying on a few decisions that have to be right.”

One answer, supported by long-term data conducted by Mckinsey (2023), is to focus less on individual deals and more on how value is built over time. Companies that consistently outperform tend to follow a programmatic approach, executing a series of smaller deals that, while modest on their own, accumulate into meaningful scale. It delivers higher returns with lower risk through compounding and discipline.

This article will then cover three areas: the case for programmatic M&A and its performance advantage; M&A strategy effectiveness across industries and contexts, and the key drivers of success.

Programmatic M&A Definition and Performance Advantage

According to the KPMG 2026 M&A Outlook, despite uncertainty, global M&A activity regained momentum through 2025. Rather than broad‑based volume growth, deal activity is increasingly concentrated among organizations that are deliberately pursuing programmatic transactions, a series of smaller, strategically aligned deals that together advance long‑term objectives and reflect clear strategic intent.

Planned M&A deal volume for 2026 – Source: KPMG

Programmatic M&A refers to a disciplined strategy of executing many small-to-midsize acquisitions over time, rather than relying on occasional large, transformational deals.

Individually, these transactions may appear modest. However, according to McKinsey (2023), collectively they represent a meaningful share of a company’s market capitalisation, typically 19% or more over multiple years. The emphasis is not on scale per deal, but on consistency, repetition, and strategic coherence.

This approach mirrors a “portfolio” mindset: making multiple targeted bets, learning from each transaction, and continuously reallocating capital toward the most promising opportunities. In an environment defined by uncertainty and rapid change, this model allows companies to remain nimble while steadily building competitive advantage.

The performance gap between programmatic acquirers and their peers is both consistent and significant. McKinsey’s analysis of 1,000 global companies over a ten-year period (2007–2017) shows that companies following a programmatic approach delivered +2.3% higher annual excess Total Shareholder Returns (TRS) compared with industry peers. Just as importantly, they achieved this with the lowest volatility of returns, suggesting not only superior performance, but greater predictability.

Comparison of M&A strategies’ total return to shareholders metrics – Source: McKinsey (2012)

By contrast, companies relying primarily on organic growth, often perceived as the safer path, consistently underperformed, delivering –1.6% excess TRS on average. Other approaches, including selective or large-scale acquisitions, also failed to match the consistency of outcomes. The long-term implications are substantial. In a sector growing at 5% TSR annually, a programmatic acquirer would, on average, generate 7.3%, while an organic-growth player would reach only 3.4%. Over a decade, this gap compounds into a roughly 50% difference in share price performance.

There is also a clear “volume effect”: companies that execute a higher number of deals within a coherent strategy are more likely to achieve positive excess returns, reinforcing the value of consistency over episodic action.

M&A Strategy Effectiveness Varies Significantly by Industry and Context

While the case for a programmatic approach is compelling, there is no universally “correct” M&A strategy. Outcomes vary significantly depending on industry structure, growth dynamics, and how deals are executed. Based on Mckinsey analysis of 1,000 global companies, TSR outcomes vary by industry, but programmatic M&A consistently outperforms with more stable returns, while other strategies show greater variability and downside risk.

Median Excess TRS by M&A Strategy and Industry, Global 1,000 Companies (1999–2010) - Source: McKinsey (2012)

Large deal

Large acquisitions, typically defined as transactions exceeding 30% of a company’s market capitalisation, can be highly effective, but only under the right conditions.

They tend to work best in mature, slow-growth industries, where consolidation creates value by reducing excess capacity, improving efficiency, and strengthening market position. In these environments, scale matters, and integration, while complex, is less likely to disrupt innovation.

However, in faster-growing sectors like high-tech, pharmaceutical and medical products, and telecom, the same deals often struggle. Lengthy integration processes can shift management focus inward, causing companies to miss critical product cycles or market inflection points. Historically, this has translated into underperformance, with large deals in such sectors delivering negative excess returns in some cases.

Programmatic deals

Across industries, programmatic M&A stands out for its consistency and resilience.

Defined as executing more than two deals per year over a sustained period, with acquisitions cumulatively representing a meaningful share of market capitalisation, this approach delivers superior results regardless of sector. As noted earlier, programmatic acquirers outperform peers by +2.3% annual excess TSR, while also exhibiting the lowest volatility in performance.

Its strength lies in adaptability. In dynamic and fast-evolving markets, where uncertainty is high and competitive advantage shifts quickly, the ability to make multiple smaller bets, and adjust course over time, becomes a critical advantage.

McKinsey’s research on the 2,000 largest global companies highlights four distinct approaches, programmatic, large-deal, selective, and organic, and shows that while programmatic M&A consistently leads overall, the effectiveness of each model is highly context-dependent. 

Comparison of M&A strategies’ total return to shareholders metrics – Source: McKinsey (2023)

It further illustrates the performance gap across approaches. Programmatic acquirers achieve the highest returns, with +2.3% median excess TSR and +1.8% average, clearly outperforming all other strategies. In contrast, selective M&A hovers around neutralperformance (0% median, –0.2% average), suggesting limited value creation.

More notably, large deals and organic growth underperform on average, with large deals delivering –0.1% median and –0.9% average TSR, while organic strategies show the weakest results at –1.6% median and –2.2% average. Overall, the trend highlights a clear gradient: as deal frequency and consistency increase, returns improve, reinforcing the advantage of a programmatic approach over episodic or non-M&A-driven growth models.

Tactical deals

A variation of this approach can be seen in tactical dealmaking, where companies pursue smaller, targeted acquisitions to build specific capabilities.

While similar in deal size to programmatic M&A, the distinction lies in scale and intent. Tactical acquirers operate at a lower frequency, using M&A more selectively to fill capability gaps rather than as a primary growth engine.

This model is particularly prevalent in technology and innovation-driven sectors, where companies acquire features, talent, or intellectual property to accelerate product development. These deals may not individually move the needle financially, but they play a critical role in maintaining competitive relevance.

Selective dealmaking

At the other end of the spectrum are companies that engage in selective or occasional M&A without a clear, repeatable strategy.

These organisations tend to execute fewer deals over time and often lack a dedicated M&A capability. As a result, outcomes are inconsistent and difficult to predict, with performance driven more by external market conditions than by strategic intent or execution excellence.

In many cases, this approach reflects opportunism rather than design, leading to weaker results compared to more systematic strategies.

Key Drivers for Success Programmatic M&A

What sets programmatic M&A apart isn't ambition, it's the consistency to execute a well-defined playbook, reliably and at scale. According to McKinsey (2023), programmatic acquirers distinguish themselves not through any single capability, but through a set of mutually reinforcing practices that compound in effect over time. These fall into three governing areas: how they plan, how they execute, and how they sustain their M&A capability over time.

Plan with Precision

Outperformance begins well before a deal is signed. Programmatic acquirers build a clear strategic thesis, one that defines precisely why and where M&A is needed, grounded in clear target focus, defined deal criteria, disciplined valuation, and a prioritizedpipeline. They revisit that view regularly, reallocating capital as priorities evolve.

Underpinning this is a proactive approach to deal sourcing and a commitment to comprehensive business cases that go well beyond a go/no-go threshold. Boards and leadership teams are kept well-informed and well-prepared, enabling faster, more confidentdecisions when the right opportunity presents itself.

Execute with Discipline

A sound plan only creates value if execution follows through. Programmatic acquirers concentrate on a defined set of targets, maintain strong stakeholder alignment, and approach each deal with deliberate focus rather than reactive opportunism.

That discipline extends through integration. Synergy targets are set at or above due diligence estimates, ownership is clearly assigned, and costs are tracked with genuine financial rigor. The outcome is measurable: programmatic acquirers are twice as likely as peers to deliver integration costs at least 20 percent below initial budget. Culture receives the same level of attention.

Sustain Through People and Portfolio Discipline

Sustaining M&A performance over time requires equal attention to two areas that are often underweighted: talent and portfolio management.

On talent, programmatic acquirers treat retention as a risk mitigation priority from the due diligence phase onward. The most effective approaches combine financial incentives with direct leadership engagement and structured career development pathways, recognizing that the people within an acquired organization are frequently the core of its value.

On portfolio, the best acquirers are equally clear about what they should not hold. A disciplined approach to divestiture, regularly identifying and exiting non-core assets, is what sustains the capital focus and organizational clarity needed to keep acquiring well over time.

References

KPMG. (2026). KPMG 2026 global M&A outlook.https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2026/03/kpmg-2026-global-ma-outlook.pdf

McKinsey & Company. (2023). How programmatic M&A fosters long-term resilience.https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/how-programmatic-m-and-a-fosters-long-term-resilience

McKinsey & Company. (2023). The seven habits of programmatic acquirers.https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/the-seven-habits-of-programmatic-acquirers