Successful mergers and acquisitions

A client was considering a merger and asked for my tips on how to do so successfully.  The simple answer was: it’s difficult.  

Most mergers fail to deliver the benefits shareholders expect.

My view is that is largely because there is insufficient energy put into the detail of how the benefits of the deal will be realised. Sadly that happens a lot for some simple reasons.  

Doing the deal is tricky and time consuming. That creates a lot of pressure on the operational leaders. They have to do the deal alongside their previously full time role of running the business itself. 

That means there tends to be a degree of reliance upon the specialist deal advisors and deal makers. Which is fine except they aren’t usually responsible for the post deal integration and realisation of the benefits of the deal. Indeed they often have a commercial interest in getting the deal done as quickly as possible with minimum distraction and complexity. A dangerous combination.

Mergers and acquisitions done right can create tremendous value

If the strategy and implementation are right as well as the deal making.  So here are ten thoughts and tips on how to be on that side of the fence!

Ten thoughts and tips on successful mergers

Here are a few tips on how to ensure a merger goes successfully from someone who has experienced the process or managed it as the operational business leader nearly a dozen times.

Business acquisition with confidence

Buying a business is one of the biggest decisions a Managing Director ever makes. Integrating two businesses is one of the most important operational challenges a business leader faces. The problem is, unless you are a specialist in acquiring and merging businesses either within or without a business, you won’t do it very often. So it’s usually a new challenge and an opportunity to learn from mistakes.

So, how does a business leader get advice?

Obviously, the specialist advisors in the corporate finance team will be delighted to help, but they are usually financiers with a vested interest in the deal completing. Likewise with accountants and lawyers aren't always the best at running businesses.

In any case, the deal specialists aren’t usually experts in practical business operations like winning the hearts and minds of staff or even knowing what it feels like to be making one of the biggest decisions of your career. Maybe even your life.  Certainly business deals tend to be bigger than house purchases although perhaps not as critical as marriage!

One alternative which many find helpful is to talk the situation through with someone like me who sees things from the business leader perspective - as Principal as Chief Executive or Managing Director. I have been there a number of times as integration manager and then deal leader myself.  Through MD2MD I've also been there to support numerous others. Whilst clearly no two situations are the same, the perspective of someone who has the scars and wounds of learning the hard way can be invaluable. So if you are thinking of buying or selling a business, why not take up the option of a free call with me?