I think you can screw up any step and it will have disastrous results. However, miscalculating the liability or not protecting against it can be fatal. It goes back to getting all the information that one can get. Although not have a strong post merger integration can defeat the whole purpose also.
I feel that the main risk in an M&A transaction is human error. It is true that there are steps and processes that can be used as guidelines as well as due diligence. However, even a single human error could have a domino effect on the subsequent stages of an acquistion.
1: Overpaying for the target company
2: Overestimating synergies
3: Weak due diligence practices
4: Integration shortfalls
5: Little attention to culture and change management
6: Overall lack of communication and transparency
7: Failure to capture synergies
8: Threats to security
9: Unexpected costs associated with the deal
10: Unforeseen market disruptions and/or “Acts of God”
All phases is very important:
1. In Due Diligence phase very critical that we can see the skeleton in the closet, what is the hidden liabilities, disputes etc that we put in the rep warranties and factor it to the valuation
2. In the post integration phase we have to make sure that the integration is smooth, fail to integrate like cultural will decrease the performance of the company.
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