The success rate in Mergers & Acquisitions has been very appalling.  It’s is estimated that only one out of 10 M&A is successful. It’s therefore very important that we need to be very vigilant at each stage of the M&A process so that we are able to address those potential pitfalls revealed in the Survey of Forbes 500 CEOs
                                  Pre-Deal planning stage

Potential Pitfalls

· Incompatible marketing system
· Did not anticipate forseeable event

· Need to spin off or liquidate too much
· Incompatible culture

Key Areas to focus on to Prevent failures
·         Formulating strategy
·         Developing the business case
·         Reviewing alternative options
·         Identifying  targets
·         Initial assessment

Doing the deal: execution stage

Potential Pitfalls

· Acquirer paid too much
· Synergy non-existent or overestimated
· Acquired firm too unhealthy

Key Areas to focus on to Prevent failures
·    Evaluating the target
·    Structuring the transaction
·    Price assessment
·    Supporting negotiations
·    Due diligence
·    Regulatory approvals

       Post-merger integration

Potential Pitfalls

· Inability to manage target
· Unable to implement change
· Clash of management styles/egos

Key Areas to focus on to Prevent failures
· Establishing the strategic framework
· Developing integration plans
· Communications
· Implementing plans
· Establish key performance metric in the form of a balanced scorecard

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