Editor’s note: This article was first published in April 2010, in the aftermath of the financial crisis; the references to “times of crisis” describe that period.
In times of crisis, some companies are crying out for someone to rescue them, while some investors and large corporations see their chance to grow their capital through mergers or acquisitions of companies that are showing losses on their balance sheets.
When you are acquiring or merging with a company, there are several factors you need to bear in mind.
Some of them can lead you to success:
- An objective assessment of the situation and of the realistic possible outcomes.
- Advice from specialists, especially in M&A (mergers and acquisitions).
- Speed in the negotiations.
- Availability and cooperation on the part of management.
- If possible, hire an agent with expertise in this kind of negotiation.
The factors that will undoubtedly lead you to failure:
- Not understanding the type of business.
- Too much involvement by management in day-to-day operations.
- Ignoring the opinions of customers, suppliers and employees.
You should keep these factors in mind whether you are going to acquire a company or merge with it.
If you would like to see two contrasting examples of mergers, read these articles: a successful merger and a merger that failed.
Further reading
- Investing in a company merger
- Should you start a business or buy one?
- The mindset of an entrepreneur
Featured image: Benjamin Child bchild311, CC0 1.0, via Wikimedia Commons.
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