Mergers and Acquisitions with a focus on merger integration

Does the Stock Market Hate Acquisitions?

Acquisitions can have an uncanny ability to destroy value. Is it, as Forbes contributor Freek Vermeulen asserts, that Wall St. generally hates acquisitions?

Vermeulen’s article goes on to show that not all acquisitions are created equal. Merger integration, particularly cultural integration, is key. He notes:

Acquisitions are just very hard to do. They usually are fraught with information asymmetries; basically most firms don’t have a clue what they’re buying. And due diligence is not going to solve that problem; acquisition integration is often hampered by cultural differences, incompatible systems and plain mistrust – something you don’t just look up in the company’s books beforehand. Hence, the troubles are hard to avoid.

Getting to know a potential target via a strategic alliance is a great way to reduce the risk of M&A. But, what if you haven’t had a chance to form that alliance and still want to do the deal?

A well planned integration that begins with a comprehensive readiness assessment and cultural benchmarking can be good alternatives to consider.

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