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Expert Answers to Biz Questions

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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Who are the Key Stakeholders in an Acquisition or a Merger?

 

Acquisitions and mergers can be extremely complicated processes, with several distinct sorts of player having a stake in the ultimate outcome. Balancing these disparate interests is critical if you’re going to keep everyone happy, and ensure that the ultimate outcome of the process is a positive one.

Let’s look at the key stakeholders, and consider the role they have to play.

Employees

The employees of the company will rightly worry about the future direction of the company, and how the results of the merger or acquisition will ultimately effect their livelihoods. Companies might keep their employees apprised of the situation throughout the process, and look to interim recruiters to help guide employees through the transition.

CEO

The CEO and the other high-up decision makers will exert a huge influence over the success of the merger or acquisition, and therefore they must bear responsibility for it. Collectively, these actors form a group called the Investment Committee, which will help to shape a shared vision for the state of the company after the transaction has been completed. While this is ongoing, members of the committee might find themselves unable to meet their day-to-day obligations, which might mean that some slight reshuffling is in order to keep the wheels turning throughout the merger.

The New Party

The outside body which is acquiring the business, or being acquired by it, will need to be kept informed of what they’re about to become involved in. A lack of joined-up thinking throughout the deal might have negative consequences when it’s completed. In some cases, you might jeopardise the deal by failing to consult with the other side on a regular basis. It’s never too early to start laying the groundwork for the post-merger state of affairs.

External Advisors

A company and its staff might be very capable, but they’re unlikely to know everything when it comes to mergers and acquisitions, which are inherently rarely-performed processes with which executives rarely get a chance to familiarise themselves.

By bringing in outside expertise, you’ll be able to avoid common mistakes, and identify and mitigate potentially disastrous complications before they have a chance to manifest. Just as you wouldn’t attempt to repair the electrical fittings in your premises, it’s not sensible to attempt to perform something as consequential as a merger or acquisition when you don’t have the requisite expertise and experience. When you consider just how consequential a merger or acquisition is, this logic becomes near-unassailable.

While it’ll cost that little more to involve outside parties in the deal, this cost might well be justified if you end up avoiding costly mistakes as a result of their input.

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