Mergers and Aquisitions
Competition often demands that organisations consider merging with each other to remain competitive and increase revenue and profits and market share. Others may be looking to consolidate their operations to achieve economies of scale and standardisation of processes. To reach their goals, the combined organisation must usually convert its information systems, relocate its operations, and redefine its management structures.
Successful mergers are a combination of four critical components: culture, business practices, technology and time. Bringing these elements together requires careful planning and coordination. The longer it takes the more costly it will be, and the potential for failure will be greatly increased.
Mergers, acquisitions and joint ventures
We are experienced in evaluating a company's culture, practices, technology, people, software, shareholder goals, and management practices carried out within the framework of existing and future practices, to support merger, joint venture, acquisition or venture capital (VC) investment decisions.
M&A risk management:
Mergers and acquisitions have only a one-in-eight success rate based on most standard metrics. Once the bankers and lawyers have departed, the various CEOs, CFOs and other executives are faced with the need to rapidly transition to a single organisational structure while trying to attain results which justify the costs, please the shareholders and keep customers loyal. Often, because of pressures of time, this is done with little sensitivity to the differing real strengths, assets and liabilities which exist between the organisations, potentially resulting in a failed merger.
Mergers most often fail because of poor communications and delays in transitioning to a new organisation structure. This gives analysts, stakeholders and customers the opportunity to feed the rumor mill, with its consequent negative impact. In addition, an unrealistic transition plan will result in a stalled process where nothing is accomplished, especially those things affecting long-term viability.
Mergers can also fail because of a poor fit of technologies, mismanagement of human factors, forced workforce relocation, disparate salaries and benefits, and cavalier HR decisions as more basic examples.
Attempts to amalgamate corporate cultures is another area fraught with problems as part of a merger or acquisition. The dominant M&A company must consider the staff and processes of the other company. The strengths of each organisation, especially those cited in the merger justification, should be nurtured and the weaknesses weeded out. Similarly, there are often aspects of one organisation not understood by the other, which may be simply ignored in the merger process, potentially reducing the shareholder value.
