Any professional services firm planning a merger or acquisition has a lot to think about. But successful integration depends a lot on the level of preparation you undertake before closing the deal.
Merger and Acquisitions as the Most Popular Form of Business Organization
With the development of the economy, companies constantly need to respond to changes in the environment appropriately. In this regard, organizations are working on modeling new business strategies, setting goals and objectives, and adjusting the company’s business processes in the appropriate style. For many companies, business restructuring is the chosen development strategy, therefore, today such transactions are gaining momentum, in comparison with the statistics of previous years, not only in the world community but also in the market.
The most popular form of business reorganization remains mergers and acquisitions, which are still considered the most difficult and risky. The main purpose of such associations is the desire of the initiating companies to realize the synergistic effect, which manifests itself in economies of scale, expanding the range of products or services provided, strengthening market positions, and so on.
Despite the numerous available literature, both on the transaction process itself, and on its individual aspects and stages, such as financial assessment of the target company, legal and legal features of the merging units, organizational and managerial decisions, transaction planning, percentage of successful transactions small. According to statistics, only about 30% of transactions are completed successfully, the rest do not achieve the planned results and synergy.
In order to effectively manage mergers and acquisitions, and especially the process of integrating companies, you must first understand the definitions, concepts, and main stages of the process. With regard to mergers and acquisitions, in this case, the author implies that such transactions lead to the reorganization of the business structure with the help of intangible assets such as research and development, human capital, and so on.
Primary Evaluation of 10-Step Merging Two Companies Checklist
Today there are many approaches, methods, models, and general recommendations for M&A challenges, but there is no holistic adaptive methodology for managing integration after mergers and acquisitions. Take a look at 10-step merging two companies checklist to follow:
- Risk Mitigation – Do your best to identify the potential risks of trade. What happens if the promised benefits are not realized?
- A programmatic approach to the process of integrating companies increases the success of mergers and acquisitions.
- The MSP standard is most suitable for creating a methodology for managing an integration program.
- Building a management model for an integration program based on a standard methodology and analyzing the resulting model.
- Analysis of the available literature to determine the basic concepts, concepts, and models of management of the general processes of mergers and acquisitions, and in particular the stage of company integration.
- Comparison of existing program management standards to test the hypothesis of greater applicability of the standard.
- Analysis of practical cases of integration of large companies to extract best practices.
- What if the two teams can’t get along? Is there a way out if the integration – despite all the heroic efforts – just doesn’t work? Once you have identified the main risks, develop realistic contingency plans to deal with each of them.
- Organizational structure. What will the company look like after the deal is closed in terms of management, structure, and personnel?
- Go ahead and make a map, knowing that some key details might change. This will help you identify potential layoffs, job title issues, structural issues, and other issues.