Planning A Successful M&A

Oct. 19, 2010 - PRLog -- We find that there are as many successes as there are failures Number of these are man-made (controlled) while a small proportion may be triggered due to external factors This article focuses on the man controlled factors and develops a framework for ensuring successful post M&A operations

Objectives Of M&A

Typically the M&A takes place due to the following  

• Diversification
• Scaling up of operations
• Integration – Backwards or forwards

Diversification

The diversification related decisions are triggered by the urge of the management to leverage on the key skills that have been assessed to be critical in the smooth running of the acquired operations ( and are perceived to be the strengths of the acquiring company)  The key here is to keep assessing and ensuring  that  the earlier assumptions that were made during acquisition are still valid. Such a periodic assessment should therefore necessarily form an important component of the regular monitoring process post acquisition.

Scaling Of Operation

Number of times the M&A decisions are triggered by the management’s desire to go into new territories (expand spatially) or expand the product range etc. This assumes that sufficient skills and experience (strengths)  exists in the acquired company and that it could grow on its own had it not been acquired. However a cursory analysis shows that the acquiring company usually lets go of the key resources of the acquired company (or even directs these resources to leave) This is a rather ironical state  – the acquiring company would loose the strengths – the very strengths for which it had acquired the target company in the first place. This implies that the acquiring company has lost track of its key objectives of acquisition somewhere down the line and therefore needs to refocus on these objectives all over again.

Integration – Backwards and or Forward

Number of times the diversification needs are triggered by integration – forward and or backwards integration In such an environment, instead of supporting the acquired company and help it perform better, the acquiring company starts to interfere in the operations of the acquired unit and thus drives away its key resources – something it would have aimed to conserve while finalizing on the acquired company Again this points towards need to revisit the primary objectives of acquisition

Conclusion

To conclude – the M&A process should continuously monitor the operations of the acquired company from the vantage that the key objectives stipulated during the selection of the target company are scrupulously maintained all strategies and intiatives should emanate from such stipulated objectives and the monitoring of any results or performance should use these objectives as the basis. This would ensure that M&A process is a success and meets the desired results. Website: http://www.FreelanceSEO.org

# # #

Dr. Sharma is a renowned corporate trainer He is equally popular among the HR Departments as well as the participants due to his uncanny ability to put across most complicated concepts in very simple and easy to understand manner He has more than 30 years work experience and more than 100 -- big and small successful training customers to his credit.