How to make a successful M&A deal

Making your Mergers and Acquisitions a Success

Making a success of mergers and acquisitions is a tall order, and so often companies go in unprepared. However, there are many things you can do to aid your chances of success and become one of the mere 50 percent of businesses that manages to pull it off. Here, we offer some advice on how to ensure a better likelihood of success.

Research, research, research

Many CEOs aren’t aware that, despite the fact the commercially sensitive information cannot be exchanged by businesses prior to a deal, there is still a lot of legally permissible information that can be found. Much of this can prove crucially important to proceeding with M&A, and takes a lot of time to research. Instead of waiting for clearance from the regulatory authorities before starting your preparation, find out what you legally can beforehand.

Identify a common vision

Merging with another business needs a plan. That’s obvious right? Well, apparently not. Before signing on the dotted line, a clear statement of the merged company’s values, direction and processes will be necessary. Ensuring that you’re all working towards a common goal is essential for the deal’s success.

Communicate

Naturally, M&A is something that causes concern among employees, and if they are not kept informed, you run the risk of rumours taking hold. At every important juncture, ensure you communicate the facts to your staff. That starts with why the merger or acquisition is being undertaken, how the company will look during and after the process, and how the deal will affect them and their work.

It’s also vital to be available to answer questions and allay concerns where necessary – if staff feel they have someone approachable to talk to, they will likely feel more secure about the whole process.

Have the resources

Often, CEOs don’t realise just how much time and manpower has to go into integration. It can take months for the right staff to be freed up from their daily tasks, for temporary replacements to be found and for the integration team’s structure to be confirmed. Get the ball rolling on this before the deal is complete, as starting too late can result in lost revenue or customers losing patience and going elsewhere.

Choose a strong leader

So much of M&A is about the people involved with the deal. A strong leader is as important as the strategic side of the process, and can make the difference between a smooth journey and a rocky ride. Choose someone with vision, energy and tenacity, who can stand their ground when the situation calls for it, and who can inspire the trust and confidence of employees, shareholders and management.

Remember why you’re making the deal

Finally, always remember why you are entering into the M&A deal, and what it is that the other business offers. It may be a slightly different customer base, or a strength in another field. Whatever it is, ensure those attributes don’t get lost.

For assistance with mergers and acquisitions, contact Charter Tax, a leading chartered accountant and tax specialist.

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