Thursday, 5 December 2013

The Process Of Merger And Acquisition For Starters

By Tiffany Gill


One wrong decision will lead into a problem or worse, bankruptcy. This is the life you are to face in the corporate world. By the time of crisis, a company usually have a merger from another company in order to save the fortunes they have established. And if you have a business and you think that it is too small to be noticed, then a merger and acquisition consulting might be best for you.

Merger and acquisition have six basic steps. These steps must be followed accordingly for there is no shortcut for this. Again, one single mistake will lead into any possible unmanageable problems. Entrepreneurship is also like an experiment that has a step by step ordered process.

Business assessment is the very first thing every company will face during the process. In this, both companies will undergo thorough evaluation and examination. Histories such as corporate culture, financial reports, the share holders and the heads, and any other business related stuff will be checked. This is because such factors might be good or bad for the future merge.

The after that, one of the companies or all of their ambassadors will formulate a proposal. This includes all the details of how the merger must be done and why. Usually, merger were done because one of the participating companies cannot sustain its financials anymore or to create a new business empire. This means that the objective of the venture must be explained thoroughly so that everyone will be convinced about it.

The proposal needs at least a quorum vote to be approved and once the proposal is accepted by the share holders, A planning exit will be follow. This probably takes time to those who are into group of companies. On this, before an exit will be held, the financial documents will be checked and other financial issues. But if the number of votes is less than a half plus one, then there will be a reformulation of proposal or no merger will happen.

After that there will be a structuring of business deal. The corporation that would take over will work on creating new marketing plans and strategies for a more innovative development. The purpose of this is to enhance the business and its credibility. In short, this process will be focusing on for the planning for the new business.

Then the stage of integration will come after. This phase, both parties are to finish all the important documents to finalize the M and A process. This involves contract and agreement signing and negotiation. Here, the scope and limitations of both companies are also discussed.

And lastly, the operating venture which the corporation will already start and operation. Mostly, this will be the experimental phase in which both will observe if the merger is successful or not. This involves all the activities and plans listed on the deal. In this stage they will also check if their expectations were met. And then if the phase went successful they can already function fully.

Even if you have already known the fundamental steps, a merger and acquisition consulting is still a necessity. Phases mentioned must be explained thoroughly especially to those who are not business tycoons. This is a critical topic that only business experts and lawyers can discuss such effectively.




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