Increasing the Likelihood of a Successful Merger or Acquisition

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Mergers and acquisitions (M&As) are known to be challenging and they often fail. Even if they are completed properly and the two companies involved are strong and ready to make a new brand, things often go wrong. But if it goes right, then M&As really are fantastic opportunities for two businesses to join forces and to become really successful. They can improve their financial performance and overall market visibility as well. However, many mistakes have been made in the past, and it seems that some businesses are simply destined to repeat these, with disastrous results. To increase the chance of being successful, you should understand more about the importance of M&As and you should make sure the managers and leaders in your company are fully committed to the process.

If there are two companies that can offer each other excellent benefits, then it is more likely that the merger and acquisition services will be delivered properly, and that the results will be positive as well. As a result, the shareholders in the two companies will see greater returns once they operated under a unified brand. But this has to be planned properly, particularly in the early stages. M&As can be needed in order to actually save a company, which is why at least one of the two companies has to be in a very strong position. If there are two companies that are both equally weak, it is unlikely that a merger will provide any added strength. This is one of the more common mistakes: two failing companies often hope that if they work together, they will stand stronger, but in reality, they just add to each other’s weaknesses.

There are a number of steps involved in a successful merger or acquisition. This includes:

  • Finding a highly experienced consultant.
  • Understanding that you have just one chance to do it right.
  • Having properly planned strategies in place.
  • Having an action plan that is followed and regularly reviewed.

Before you decide to go ahead with a merger or acquisition, you must take all the different elements into consideration. Joining two companies will have legal, financial, business, and operational applications for both the companies involved, as well as of the new company that is formed. It takes hours of work to look at all these elements, and focusing on details is really important. The result has to be a synergy of two companies coming together as one across all the different departments. If done properly, profitability, revenue, and productivity will increase.

Last but not least, you have to have realistic expectations. You have to be honest with your staff as well, and tell them up front whether or not layoffs are likely to occur. Layoffs are bad for morale, but never more so than if you told people their jobs were safe, only to them change your mind. You must have full transparency in place, because people will be worried about their future and it is your job to make sure they feel as secure as they possibly can.

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