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Mergers and Acquisitions (M&A) Success Factors
Dave Carlson - February 21, 2013
- Measure M&A success based on the creation of competitive advantages and real shareholder value.
- Gain insights into industry challenges and future trends before pursuing a deal.
- Pass up acquisitions in non-related businesses.
- Understand the M&A process and clearly establish owners, deliverables, and timetables.
- Anticipate and focus on key M&A decisions.
- Drive every aspect of the M&A deal from senior leadership level.
- Be prepared to walk away from a deal that does not show potential.
- Choose strategic moves that strengthen the company.
- Seek out attractive targets in alignment with the deal rationale.
- Consider the limitations of valuation methodologies.
- Pay the right price.
- Do your homework with the best available information.
- Promote the deal rationale from first contact.
- Know the seller’s intents.
- Pursue tough but fair discussion criteria.
- Assess the quality of the target’s management.
- Verify that synergies will result in real value.
- Develop a clear M&A business case.
- Align the two businesses based on sources of value.
- Conduct a timely and effective due diligence
- Assume nothing.
- Evaluate and assess cultural dissimilarities.
- Utilize the power of information technology to accelerate the due diligence process.
- Know the added risks of cross-border mergers and acquisitions.
- Name an integration manager at the time of the announcement.
- Develop detailed integration plans prior to the closing.
- Retain the best people by treating them as the company’s most valuable assets.
- Maintain a strong focus on customers.
- Transition to an integrated management team quickly.
- Maintain a fast integration tempo.
- Communicate the integration priorities.
- Define a common operating philosophy and consistent practices.
- Realize M&A deal benefits tangibly and in a timely manner.
- Tie employee incentives to synergy realization and to the fulfillment of integration requirements.
- Develop in-house M&A skills.
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| (Source: Massoudi, 2006, pp. 3, 19, 41, 67, 83, 101, 119, 145, 165) |
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Reference
Massoudi, B. B. (2006). Do the right deal, do the deal right: 35 success factors for mergers and acquisitions. Seattle, WA: Continental Publishers. |
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