M&A can allow businesses to expand their geographical reach and gain an edge over their competitors, and gain access to new technologies, employees, or assets. M&A can be a long and complex process. There are months of time spent evaluating potential companies by conducting formal due diligence, which involves the deepest dive into the company’s information – financial, commercial and operational. The process is more difficult if a business is located in another country, as many of the same steps are required to succeed, but with additional issues with collaboration and communication.
Preparing for Day 1.
When a company is acquired, the very first day of operations (known in M&A terminology as “Day 1”) must be prepared. This includes establishing organizational structures, merging back-office infrastructure and IT systems, as well as informing staff members on what will happen in the future. The M&A team should also ensure that all important documents, like legal agreements and financial models, contracts, etc are readily available.
Building a Vision that is shared
Understanding the similarities and differences in the culture and business goals between the parties is essential to the success of an M&A strategy. This is particularly important when businesses are buying or merging from a distance. A new organization that does not have an enlightened vision could lose its direction and cause a rift at work.
M&A is a high-stakes process that often leads to unintended consequences. Particularly the sunk cost fable can push M&A decision-makers into agreement traps where they are forced to sign the terms that are worse than the alternative.
uncovering merger and acquisition non formal secrets