Business mergers have been happening and will continue to happen for a long time to come. Globally, the value of mergers and acquisitions stands at about $3.7 trillion. The reality is that some companies are more valuable when consolidated with others. And as long as that holds, business mergers will continue to happen.
Unfortunately, things don’t always work out as planned. Despite the best of intentions that people may have when merging their businesses, some will fail. Research shows that 83% of mergers fail. Therefore, you need to plan for your company merger carefully. Here are several strategies you can use to make your business merger successful:
1. Do due diligence
Before you agree to a business merger, you need to do due diligence about every aspect of the business that you are merging with. Do not be quick to agree to a merger because it looks good on paper. Things are not always what they appear to be. Consider the fact that the business that is merging with yours could be hurrying things along because they are in a financial mess that they are tired of dealing with.
You need to think about the debt the company you are consolidating with is carrying. Is it something you can handle once unified? How many costs would you have to cut? And how would cutting jobs affect your brand value in terms of public perception?
Also, you should think about the future. Will merging your business put you in a better position? Can you achieve the market leadership you have been aspiring to? Or are there better options that you have not explored because you have not done enough research?
Doing due diligence about every aspect of your merger and acquisition process enables you to be prepared for the challenges ahead. You would have the knowledge you need to successfully and fully engage in merger integration.
2. Engage your employees
Your biggest business resource is your human resources. Your employees can make or break your merger. The human factor is the biggest reason as to why merger integration fails. So while it is tempting to clock your entire merger and acquisition process in secrecy, you shouldn’t.
You need to engage your employees and let them know what is going on as soon as the merger process begins. Clear and regular communication will enhance trust and make the employees less likely to jump ship or disengage. Your organization should also put in place strategies to integrate different organizational cultures. If people cannot find common ground in how they do things, you should be prepared for failure.
3. Engage merger integration consultants
Do not make the mistake of thinking that you will defy the odds against you when merging your business by going it alone. You need to engage with merger integration consulting professionals as soon as you can.
For your organization to remain successful, you need to identify the best practices of each company and integrate them. Both parties still need to continue with the critical functions even as they try to assure all the stakeholders. Running two sets of employees and core business operations while serving two sets of customers and successfully integrating businesses with differing organization cultures will take time. It will be difficult. Having merger experts to guide you every step of the way will help.
While mergers are here to stay, they can be challenging to pull off. But if you engage professionals to help you with the process, do due diligence, and keep your employees engaged, you can defy the odds. Yours could be one of the few mergers that are successful in the long term.