Companies acquire other businesses to reap economic benefits like larger profit margins from economies of scale, access to completely unique technologies, increased market vitality, diversification, management’s personal incentives, taxes considerations and the possibility of uncovering hidden worth. But even in the best of times, M&A deals can have their promote of failures.

For instance, the famous deal between AOL and Time Warner has turned into a textbook case of how not to ever conduct a merger. The merger’s valuation arrived crashing down shortly after it had been announced and both businesses struggled to make the deal do the job.

Moreover, M&A deals can result in employee discontent because of job cutbacks and concern about the company’s future. In addition , the transaction’s impact on financial debt levels could increase the risk of financial worry in the blended entity. This might be especially difficult if the bidding process company utilized debt to finance the acquisition.

The success of an M&A transaction is dependent upon careful planning, open communication and effective coordination between advisors. The M&A team at Morrow Sodali is very well equipped to assist you navigate the challenges that can arise within a transaction and achieve your business goals. We offer services including due diligence, regulatory compliance and regulatory filings along with support in purchases involving overseas companies. Please contact us to learn more about our M&A and Activism prediction capabilities.