Pink Fire Pointer Interactive Marketing: The execution of mergers and acquisitions, improving the success



The execution of mergers and acquisitions, improving the success


Remarkable phenomenon of mergers and acquisitions in the company. It will provide additional growth and profit opportunities. Companies also often used as an exit strategy, and it is important to determine their ultimate success and financial independence. Unfortunately, things do not always go smoothly in mergers and acquisitions, and sometimes it is a complete failure.

Rationale for M & A

Overall, mergers and acquisitions, see how to improve their competitive advantage and financial well-being because of mergers and acquisitions are as follows:

* Includes corporate shareholder value management to improve shareholder value is measured. Companies on the other hand, want to make the material after they have successfully built their businesses.
* Market Expansion. Further strengthen the growth potential of companies in the market, and the wide geographical spread.
* The high efficiency. Economy of scale can be obtained by increasing the size and operations through better control of operations (such as control of the supply chain).
* The availability of resources. Strengthen the competitive advantage of better access to finance, raw materials, skills and intellectual capital.
* Manage risks. Can reduce risk through diversification of activities and a choice of supply networks (eg, production and procurement of different countries).
Listing potential. The public offering of shares of the company to increase growth and profitability.
* The need, countries have different legal requirements (for example, there are some South African Black Economic Empowerment (BEE) regulations that companies must adhere).
* Opportunities speculative. Companies often simply buy another company or sell it in the layer of the company and sell it.
* Other products, services and means of production, storage and distribution channels and a license for an additional level of service and develop the company.

Why many mergers and acquisitions fail.

Mergers and acquisitions are various reasons for this failure may be a physical merger and acquisitions take place before, during implementation, or maintenance of the new merged entity. Possible failure of a number of factors, including:

* Failure is not an agreement between the parties due to factors such as different cultures, expectations and risk profiles.
* Legal Issues: The competition laws of different countries often prohibit transactions that are considered anti-competitive.
* Implementation of the system (including computers) is often not very compatible, and it is difficult to merge.
* The financial failure. Have not reached the expected turnover and return on investment, and / or liquidity of the company and solvency risks.
* People have failed. Cultural differences, hostility to the crew and can cause serious problems.
* The strategic objectives are achieved: This includes the realization of synergies, such as increased efficiency and market penetration.
* Risk management for the risks (legal, commercial, financial and operational) in the merged entity are far too high.

Success criteria of a successful merger and acquisition

Successful mergers and acquisitions can be measured against the two main factors:

* The growth of shareholder value. Sustainable growth in shareholder value to be achieved over time.
* Synergies materialize. Achieve the expected synergies, such as more efficient operations, improved profitability and market share increase.

Improves the chances of a successful merger and acquisition

Companies can increase their chances of success of mergers and acquisitions with good planning, management and labor within the methodology previously established in the merger and acquisition, as well as a program. The specific details that must be managed properly are:

* Strategy. Mergers and acquisitions are part of a broader strategy of the company and must be carefully considered and planned.
* Due Diligence. Risks (eg legal, business, financial and operational) are analyzed as a process of due diligence. This process must be carefully planned and implemented.
* Synergies, synergies should be carefully planned, and attention should be paid to its implementation.
* Costs: The costs can easily skyrocket during the process of mergers and acquisitions for the budget and expenditure to be monitored.
* Expectations. False expectations of different groups often lead to disillusionment. All expectations should be discussed and clarified with all parties concerned.
* Transparency. Good communication and advertising (if any), such as employees, customers, suppliers and other business partners are desirable. Rumors (often unfounded) that are not quickly suppressed, that the bud can damage morale and role players can request alternative opportunities.
* Systems. Fusion systems (including computers) should be provided, and the Director General or the maximum care for the new merged entity may decrease.
* Maintain interest. Management commitment is essential. Their involvement (if necessary), can greatly increase the chances of success.
* Keep an eye on the ball. M & A means to an end. Companies often can not see the point of view, and other important aspects of the company, and then forgotten.
* Change management. The success of any merger and acquisition often depends on the successful merger of two very different corporate cultures. In addition to this, people often have some injuries and possible resistance to the process of change management professional can make the difference between a successful merger and acquisition or failure.
* Trusted Advisors. Mergers and acquisitions are often one-time experience for many companies in this situation, as well as, and when companies do not have enough qualified people to handle all aspects of merger and acquisition, they should be entitled to external consultants. This may include consultants, lawyers, auditors, business consultants and facilitators of change management.