Every business’s integral desire and need is both vertical and horizontal growth. Organic growth, that is, development from within, is often slow and sometimes difficult. That is why the trend towards mergers and acquisitions is growing. It can be called instant expansion.
Many large corporations are constantly looking for potential merger and acquisition targets.
Some even have a central cell or senior person who concentrates on this aspect. Depending on the company’s policy, which may be to diversify or expand in the same area, add more business, or strengthen the research center, they are constantly tracking the business world. They usually report directly to the decision-making body.
In the field of business, no business can exist without the help of another. Integration of mergers and acquisitions is a process that consists of various transactions, such as mergers, acquisitions, consolidations, management acquisitions, asset purchases, and takeover bids. They are all linked to two companies, where one company offers to buy the other, which may include all or only part of its assets. To have a better and longer integration plan, both parties must clearly understand the internal transactions.
A merger is when both boards of directors of two companies agree to merge assets and are approved by shareholders. After the merger, the absorbed company will cease to exist but become part of the company that carried out the absorption. Both companies may retain their corporate name and legal form. Consolidation occurs when two companies’ shareholders approve healthcare mergers and acquisitions that create a new company. All shareholders will receive common shares of the newly formed company.
The best practices for M&A integration
- The first thing to remember is to act quickly because everyone is waiting for change.
- Communicate early and often. Make an integration plan for the first 100 days and ensure the non-negotiables are stated and understood. You talk to employees, but you need to talk to customers and vendors.
- Create a strategic plan for all decisions.
- Focus on company priorities.
- Create a framework to measure employee performance as early as possible.
- Assign integration resources.
Summary
The key steps in acquisition integration are aligning the strategy, defining the culture, allocating resources, creating action plans, and doing it smoothly but professionally. There must be a timeline for aligning your strategy with your people so that the integration goes smoothly, or there is confusion among employees, customers, and vendors. All factors that may affect transactions must always be considered to prevent further risks.
