Ideally, merger and acquisition transactions are more than just a way for the larger company in the merger or for the acquirer to gain access to technologies, to market share, or to technologies and assets – these transactions should also have a value-creation side to them.
This also means that the strategy used for the transaction should be developed with value creation in mind – here are some ideas from a respected M&A broker on how to achieve that:
- Considering long-term objectives – when evaluating the qualities of the companies engaged in the transaction, special attention should be paid to the features that make the participant companies unique and special and to how those values can be preserved and put to work after the transaction is complete;
- Understand the importance of corporate cultures – whether the transaction is a merger or an acquisition, the resulting business entity needs to be compatible with the corporate cultures of both participants. The failure to recognize the dominant cultural values of the other company in the transaction will result in value loss and that can have very severe consequences very soon, such as key employees leaving the company;
- Involvement of the key persons from both companies – mergers and acquisitions should be prepared by the decision-makers from both companies, such synergy being the only way to preserve the best features of both worlds.