Which are the most common mistakes do company make during the transaction?

This topic contains 11 replies, has 11 voices, and was last updated by  Krishnan Bangarusamy 1 month, 3 weeks ago.

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  • #91954

    Mihajlo Buljcik
    Participant

    What do you think, based on your experience, which are the most common mistakes do company make during the transaction?

    #92021

    The most common mistakes company make during the transaction is expecting the culture of the acquiring company to to be the same as the acquirer company. Failure to
    determine the different operational issues will cost the acquiring company heavily. Culture is a complex concept. It includes groups that we are born into, such as gender, race, national origin, class or religion. Managers must deal with multiple ethnic groups with very different cultures. Failure to recognize will result in failures of merger and acquisition activities.

    #93957

    Silman Ondrej Dia
    Participant

    Hi there,

    According to the course on “Types of Mergers, their Implication on Integration & Key Success Factors” some of most common management mistakes that could be applied during the transaction are:
    – Lack of transparency
    – Poor information sharing and transmission
    – Overstated synergies
    – Understated cultural difference
    – Lack of knowledge / professionalism

    #94030

    The most common mistakes are related to:
    -Poor preparation, in terms of strategic analysis when identifying a target
    -Overestimated assumptions, regarding the market potential and mostly the synergies
    -Leading to excessive valuations and price paid
    -Poor execution during Post Merger Integration leading to organisational problems and failure to deliver reuslts

    #94615

    Renata Porto
    Participant

    Poor assessment.
    Lack of proper planning.
    Lack of transparency.
    Lack of a solid post merger plan.

    #94623

    Erik Cornelius
    Participant

    Based on my experience, I substantially agree with what’s already been said; my top mistakes would be as follows:

    * Getting too invested in a deal and wanting to win, even when economics no longer support continuing
    * Insufficient communication (especially where time zone / language barriers exist)
    * Overly optimistic perceptions of synergies, or synergies that were generated to justify the deal rather than what was realistic
    * Overly aggressive timelines on realization of said synergies
    * Insufficient planning/resourcing dedicated to post-merger integration activities

    #99661

    Fathurrahman Latama
    Participant

    -Lack of planning
    -Lack of expertise
    -Poor execution of the PMI
    -Expecting to copy acquirer culture

    #103654

    Frederick Byrne
    Participant

    -Underestimating cultural differences which exist between the two entities

    -Not allocation sufficient resources towards PMI (I.T. integration, reporting requirements and streamlining, HR etc.)

    -Lack of communication with target entity relating to integration timelines and expectations. This can lead to tension

    -Incorrect application of valuation models

    -Overestimation of potential synergies and value creation

    #104637

    Frederick Byrne
    Participant

    My personal opinion would be not treating employees as human beings. A merger can leave people feeling anxious and undervalued, and as a result they can fall victim to a significant amount of stress. Treating employees like cogs in a machine can leave them feel disenfranchised, unmotivated, and unsure of where they stand in the long-term.
    Addressing these areas via appropriate people management and communication will go a long way to ensuring strategic goals are met, as without employee buy-in, integration efforts can be severely hampered.

    #108849

    Melissa Mason
    Participant

    I think underestimated the value of offering change management and investing time and resources to dedicate to these activities. For me the other area is over estimating synergies and value creation.

    #109351

    The common mistakes that company from the very beginning in the plan not cover the HR also not involve HR Unit in DD, especially when acquire the majority of the company. Good communication to the target is not done which is all employees are waiting what the next plan from the aquirer to the target company. The integration is the key of the success of M&A which is very difficult to realised than plan.

    #109366

    Hello, Most of the other members of the group have covered the common mistakes companies make during M&A.
    To me, the most critical is missing on the cultural integration.

    Companies do not take it as a serious dimension and eventually realize, it makes all the difference among other aspects.

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