Acquisition strategy, Financial Management

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The acquisition strategy

The most important strategic consideration is the size of the acquisition. The completion of smaller series should be considered in the beginning than the larger  ones. This will  help the acquirer  to be trained from  each  of  the successive acquisition so that he develops a significant experience. If the acquirer starts with a number of smaller firms, he can work on its acquisition skills remarkably.

The more liable strategic issue faced by the acquirer is the reactions of the competitors to an acquisition. This does not mean that the acquirer should back away from the acquisition because of the fears of competitors. The acquirer  must  be  conscious  of  how  the  transaction  will  guide  to  a reformation of the aggressive environment in this industry. There are some cases where the buyer will intentionally back away from an acquisition, thereby leaving the competitor to acquire.

The value of merger and acquisition transactions lies in the execution. It requires real experience, comprehensible strategic objectives, technical M and A expertise and capable people who act as a strong base for M and A program. Successful strategic acquirers use process and discipline to avoid an M and A breakdown that will certainly impair and devastate shareholder, customer and employee value.

The  approach  of  M and  A  focuses  on  supporting  clients  in  developing efficient structure and discipline which include:

  • Providing a framework for the target screening, transaction execution and combination phases.
  • Communicating a compelling strategy to the employees, else they will resist the change process required for effective combination.
  • Considering the people, process and technology into the target screening phase.
  • Using a well-defined structure with a unique combination.

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