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What to consider before Merger/Acquisition

By Rohan A T

Running a successful business organization is no cake walk and during the recent times, when covid19 has run rampant and nearly destroyed many businesses, it is even tougher on business leaders to keep their companies afloat. As the industry realm is getting themselves ready for the post-pandemic world, it is high time that businesses come up with innovative strategies to get a head start in the industry. This is also crucial to get some distance between you and the rest of the competition. Mergers and acquisitions (M&A) are two business strategies that will not only help the company to move forward but it might also help them to increase their market presence at the same time. Mergers are when two business combine and turn into a single business entity. Acquisitions are a little bit different where here a bigger company will acquire a smaller business. Even though there are some differences between mergers and acquisitions, there are still certain common facets that a business leader should understand or know about before moving ahead with a merger or an acquisition. And in this article, we will take a closer look at some of these things that are crucial.

  • Know what you want: This is the first and most important thing that a business leader should know before planning for mergers or acquisitions. You have to know about what you want and through a M&A what are you expecting to achieve. Having a clear idea about this is crucial owing to the fact that if you yourself don’t know what to expect from an M&A, then it is highly unlikely that you can merge or get acquired by the right company. So, before planning for a M&A, make sure that you have a clear idea about your goals and aspirations as an organization.
  • The Vision: If your company is preparing for a M&A, then make sure that you and the other company are on the same page when it comes to the vision, and short-term and long-term objectives. If you are two companies that have different goals and aspirations, then it might be hard for you to co-exist with one another.
  • Regulatory Issues: When you are planning for an M&A, then this is a crucial step that should not be over-looked. You should check and recheck that the company that you are merging with or you are acquiring is following all the regulatory compliances and have the right documents with them. if you go ahead with the M&A without looking at this, then it might cause some serious problems in the future. So, to avoid it, make sure that you check everything.
  • Employee Turnovers: If you are planning on acquiring or merging with a company, then this is something that you should be aware of. if you are going to lay off a lot of employees in the company that you are acquiring, then it will cause various adverse effects for the business. First and most importantly, the remaining employees will have concerns regarding their own employment, which can lead to less productivity.

M&A is an important turning point for an organization and a successful M&A can help your business to strive for sustained success in the industry while a bad M&A can be disastrous. So, it is important to keep that in mind before going ahead with the merger or acquisition.

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