Reduce the Risks and Costs of Mismanaged Mergers, Takeovers, and Consolidations

Excerpt from  Making Mergers Work

Introduction

Growth through takeovers and consolidations is a high-stakes game.

The element of risk adds to the drama, excitement, and overall appeal of the M&A game. But as always, where there is much to be gained, there is a precipitous downside risk as well.

The gamble becomes a safer one to the extent that companies prepare themselves properly for corporate marriage. This involves a number of preparatory steps:
 
  1. Developing organizational self-insight, such that managers and executives understand their own compatibility as a merger partner.
     
  2. Determining what the new financial demands or considerations will be, and how they can be successfully handled.
     
  3. Thinking strategically about the kind of partner it will require for the relationship to survive over time.
     
  4. Purposefully and proactively looking for such a potential partner, and creating options to choose from.
     
  5. Investing the necessary time in organizational courtship prior to the merger ceremony.
The huge sums of money invested in an M&A partner are most at risk, though, after the deal is done. In fact, the closing is just the beginning. . . .
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