Robert has more than 25 years of experience leading and advising on strategic financial planning, mergers and acquisitions (M&A) agreements, financial assessments, financial reporting, budget modeling and administrative operational improvement initiatives for higher education institutions.
John has more than 15 years of experience in higher education consulting and advisory, helping universities across the globe achieve their strategic, financial, and operational goals.
Lee is a higher education consulting leader and former administrator who helps colleges and universities develop strategies to transform their operational and financial performance.
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7 executive lessons from M&A activity in U.S., UK, and Australia
3-Minute Read
November 2, 2022
Robert SpencerPrincipal
John WorkmanManaging Director
Lee M. SmithManaging Director
In Brief
Consolidation pressures are rising across UK, US, and Australian higher education, driven by different system dynamics but shared financial strain, making M&A an increasingly relevant strategic option rather than an anomaly.
Successful M&A is strategy-led, time-sensitive, and selective, with failures most often stemming from unclear partnership goals, poor fit, delayed action, and costly exploratory activity without commitment.
The strongest outcomes come from partnerships that expand academic offerings or combine complementary strengths, while mergers pursued solely for scale, efficiency, or survival tend to underperform.
The September announcement of the universities of Kent and Greenwich's proposed merger into the tentatively named London and South East University Group (LSEUG) has reignited merger and acquisition (M&A) conversations across UK higher education. Consolidation has historically been rare in the UK sector, constrained by regulatory complexity, cultural resistance, and governance structures, but the question now facing leaders is unavoidable: does this signal a turning point?
The UK sector is not alone in confronting this possibility. In Australia, one of the most closely watched developments in the sector began in 2024, when the University of Adelaide and the University of South Australia announced plans to merge into Adelaide University, a new institution expected to serve approximately 70,000 students when fully integrated in 2026.
Meanwhile, the US is already deep into a consolidation cycle. Since 2020, approximately 100 universities have closed or merged, affecting nearly 200,000 students and more than 2 billion USD in endowment assets. Huron's analysis of 10 years of financial and enrollment data indicates that, within the next decade, another 370 institutions, representing 600,000 students, will experience financial pressures similar to those since-closed and merged institutions.
Taken together, these developments raise a critical question for leaders across the anglosphere: is consolidation accelerating, and if so, what should institutions do now?
Is consolidation inevitable or contextual?
One school of thought frames consolidation as a simple numbers game. The US has roughly 7.8 universities per million people, far exceeding Canada's 3.8, the UK's 2.4, and Australia and New Zealand's 1.6 institutions per million. While an exact tipping point or golden ratio isn't obvious, the data suggests the US has more opportunity for consolidation than its northern or transatlantic peers, particularly among smaller, tuition-dependent institutions. Yet viewed from another angle, it is the UK that appears increasingly exposed when compared with Australia and New Zealand. The implication is clear:
Consolidation pressures are relative, not universal, and each system's risk profile reflects how it evolved - and how it is funded.”
The underlying drivers also differ. In the US, consolidation is partially the result of declining youth populations and shrinking enrolments, especially among the small institutions most dependent on tuition revenue. In the UK and Australia, pressure is driven more by policy changes and volatility in international student demand.
Despite these differences, the sectors share several fundamental challenges. Across the anglosphere, university revenues have failed to keep pace with rising costs or even inflation for more than a decade. Marketised, tuition-driven models are increasingly exposed to changing student preferences and alternative providers. Public confidence - and public funding - continues to erode.
How successful institutions approach M&A decisions
By supporting dozens of institutions in M&A due diligence, partner identification, and strategic partnerships, clear patterns have emerged regarding what works, what fails, and why. These lessons are directly relevant to senior higher education leaders as they evaluate their own paths forward.
1) Consolidation is a strategy, not a solution. Mergers should not be pursued as an end in itself. Success is anchored in a clearly articulated strategy tied to mission and long-term financial sustainability. Combining two struggling institutions rarely produces stability; more often, it results in a single, larger organisation burdened by two sets of legacy challenges. As one university executive observed, this approach is akin to “pitching two anchors together and hoping they swim.”
More successful outcomes typically involve institutions with complementary strengths. Financially strong universities may pursue strategic combinations to expand academic offerings, advance mission, or enable growth. Conversely, leaders of financially challenged institutions must identify distinctive assets that create value for a potential partner.
2) There’s no one-size-fit-all model, but not all models perform equally. There is a wide spectrum of potential strategic alliance types, including third-party agreements, joint ventures, real estate divestments, and full mergers. Importantly, these models have varying degrees of transformational impact to the institutions involved. Some leadership teams have gravitated to what they perceive as the ‘maximum necessary’ level of transformation. Cross-campus shared services, for example, is often touted as a more tenable solution that allows institutions to retain their independent missions, identities, and portfolios. Yet, these partnerships have, in practice, led to almost equal levels of complexity and disruption as consolidation, with much less financial benefit than anticipated.
3) An underdeveloped partnership strategy is the most common failure path. A recurring mistake is rushing into partner discussions or deal negotiations without sufficient clarity on goals, success measures, and constraints. Institutions that fail to define their strategic aims risk expending significant time and resources on poor-fit partners, rather than focusing on a limited set of viable opportunities. Institutions that do not clearly define specific aims for strategic partnerships may waste energy and resources engaging poor-fit partners that should be spent on better, limited opportunities. Or worse, two institutions deep into consolidation conversations may find they are not fully aligned on culture, governance, or mission.
One critical — and often fraught — decision is how to describe a consolidation. The chief executive of one university near the end of a deal reflected that, while the arrangement had a clear acquirer and acquiree, they had carefully avoided that language. Unfortunately, this created later tension and misunderstanding. She commented they had "tap danced around the obvious dynamics, and it would have been better if we had all been honest at the outset." A senior leader at a different institution noted, "There are no mergers in higher education, only acquisitions. But that sounds too corporate. So, we all say M&A just to be polite."
4) Financial pressures compress timelines. The more challenged an institution’s financial position, the less time it has to act. One of the most common and costly mistakes is mismanaging time: either spending too much on the wrong opportunity or leaving too little to pursue the right one. Institutions often delay exploring strategic options until circumstances become critical, weakening their negotiating position and limiting partner choice. In extreme cases, institutions have been forced to close simply because they could not remain solvent long enough to execute a viable partnership. In other cases, institutions fail to appreciate the runway required to bring along key constituents and ultimately succumb to resistance that could have been overcome with earlier action.
5) M&A "window shopping" comes with real costs. Growing interest in M&A across the industry has spurred phantom activity by encouraging hopefuls, regional expanders, and serial acquirers to “window shop” with limited commitment. For every successful merger or acquisition, there is a rough ratio of unhelpful phantom activity, which is a poor use of time, money, and energy for any leadership team, especially those of already-struggling institutions in need of partnership.
6) Both offensive and defensive stances are prudent in a fast-changing market. A handful of leading, financially healthy institutions have pursued aggressive M&A strategies, viewing inorganic growth as their best financial path forward. Both Northeastern and Villanova universities in the US have generated hundreds of millions in net-new revenue and assets through a handful of strategic acquisitions. Leadership teams taking a more defensive stance have also acted in the best interest of their institutions. For example, several universities have absorbed small, local campuses. While such moves may not appear transformational in isolation, they can be strategically decisive.
7) M&A centred on expansion of academic offerings has the highest success rate.
Evaluating trends in the success and failure of M&A instances tells an interesting story. One way to categorise partnerships is by their stated goal, such as geographic expansion, real estate acquisition, achieving scale or efficiency, and adding academic offerings to enhance the portfolio. While a handful of institutions have succeeded in using M&A to expand geographically, partnerships based on expanding academic offerings have the highest success rate, by a wide margin. For example, Texas Christian University (TCU) and the University of North Texas Health Science Center successfully created a private-public partnership to establish a new school of medicine. Arizona State University acquired Thunderbird School of Management to add an additional MBA offering to their portfolio. This “build vs buy” dynamic is common in the corporate world but new to higher education, where a marketplace of assets is only now beginning to form. Conversely, other M&A approaches have not fared as well. One senior leader reflected on a recent acquisition: "We thought we were acquiring a unique physical asset in a new location — what we actually got was a large, deferred maintenance backlog."
What comes next?
The higher education landscape is evolving into a more explicit marketplace of assets, capabilities, and partnerships. Institutions that learn how to navigate this environment deliberately and early will play an outsized role in shaping the sector's next decade, while strengthening their own resilience.
For leadership teams considering their options, the question is no longer whether M&A belongs in the strategic toolkit, but how, when, and why it should be used.
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