Successful Merger

Mergers and acquisitions are usually treated as financial decisions, but as we have stressed throughout the text, there are very few purely financial decisions. The vast majority of business decisions are best made using skills from several’ business disciplines. Mergers are no different. To increase the likelihood that a merger or acquisition will create value all of the various business areas must be involved. Here are just a few of the ways you can get benefit from the expertise of other business colleagues.

Identifying Acquisition Targets

This requires people from both marketing and strategic planning. The acquisition target must bring something valuable to the firm. It must move the firm along the desired strategic path.

Due Diligence

Due diligence is the series of exploratory activities used in evaluating a company prior to finalization of the M&A. The traditional approach to due diligence focuses on several key areas: financial, legal and regulatory, and accounting and tax. Without question, each of these areas is highly complex, and scores of business and academic textbooks have been devoted to the topics. Broad treatment of them is beyond this article, yet it is important to understand the fundamental financial and legal orientation toward due diligence investigations in order to identify an M&A’s principal shortcomings and pitfalls.

As The Deal Progresses

Once a target is identified and an offer is made, the firm needs to determine which target employees are particularly important to retain. Investors are smart and will quickly see through claims about the value of the merged companies.