Mergers and Acquisitions (M&A) are common in business, but just the same, it can be a challenging period for everyone involved.
Whether you’re acquiring a business or your company is merging with another, it’s best to have a full understanding of what happens in an M&A. This way, you and your employees could make a successful transition.
Reasons for Mergers and Acquisitions
The most popular reason for an M&A is to acquire assets or new products. If you’d like to expand your inventory but don’t want to go through product research and development, you may consider acquiring another company.
Take, for example the acquisition of Skype by Microsoft. Instead of making their own telecommunication application, Microsoft simply bought one that has been on the market for many years and is performing rather well.
Another reason is to scale or reduce operating costs. If you’re building your own products and are ready to scale, consider acquiring a company with a manufacturing plant, like what Proctor & Gamble did with Gillette or Amazon with Zappos.
Surviving an M&A
Planning and assessment are essential for a successful merger and smooth transition. Here are four things to focus on during this period:
1. New processes — When two companies merge, their operations merge too. This may include timekeeping, accounting, and billing methods. Be an active part of the process and always think about your staff. Make sure they are informed of these changes.
2. Company cultures — It may take some time for the newly merged companies to truly feel like a single organisation. During the transition period, consider evaluating the cultural differences of the companies. See how you could integrate the culture of the other company with yours. Understanding the differences between companies could help prevent friction between the two organisations.
3. Restructuring of organisational charts — If you’re merging with a company that has a solid foundation, there may be no need for a significant organisation overhaul. If that’s not the case, think about setting up a meeting with leaders of the business you’re acquiring so you could fully understand their organisational chart.
4. Roles and workload — An M&A doesn’t mean some employees will automatically be cut off. Evaluate any overlapping functions and when possible, develop a career path for employees based on your restructured organisational chart. This way, you could minimise (or avoid) having to lay off employees.
Not sure how to go about acquiring a business or merging with another organisation? Kidmans Partners can help. We are a team of highly experienced advisers who can guide you every step of the process. Call us at (+613) 9836 2900 or fill out our contact form to learn more about our services.