Constraints to successful merger integration, Other Management

Constraints to Successful Merger Integration

Successful merger integration involves a number of constraints. Some of the key  constraints  include maintaining vital managers    and workforce, resistance from  key constituents  including  industry  organisation,  unions, clients, suppliers, communities or regulators, set up a wrong benchmark for achievement and varying the criteria for success once a transaction is accomplished.

Some of the constraints that should be dealt in the process of M and A are:

  • People: The most fundamental limitation to M and A incorporation and implementation is human resource. The support of people is very necessary otherwise the buy-in transaction is destined to failure. The input to each feature of a contract whether the preliminary valuation, the due diligence or the integration should comprise of the management and employees. Most of the time the companies are unaware of how the M and A works can create a significant barrier to success. It is essential that the key personnel be brought into position to guarantee their stay during the transaction and are suitably recognised for their involvement in the deal.
  • Other elements: suppliers, clients, unions and regulators: In addition to people, there are other elements that can serve as a constraint in a contract. These elements may range from the regulatory agencies to clients, suppliers and to industry organisation as well as unions. The maintenance of each entity should be handled with intense care and brought into the information flow at the proper time. A tremendous wisdom has to be used on paper and employees, during a transaction. Acquirer and target company may buy into the transaction logic, yet the transaction may alter in such a way that the justice department intervenes. Therefore, it becomes essential to deal with antitrust issues in the beginning. Also, employee union may get in the way of a transaction providing some form of benefit to its union members.
  • Providers of capital: The obstruction to transaction can also be raised by the providers of capital finance in an acquisition. These constituents may include commercial banks, public debts, equity holders and private equity firms. It becomes necessary that the state of the capital market at that time must be accomplished.
  • Competitors: A critical barrier to successful merger integration is competition. The action by the competitors varies in a number of ways ranging from objecting the deal to antitrust regulators or an attempt to steal employees and customers. Thus, plan should be done accordingly to pre-empt the behaviour of the competitors.
  • Ongoing review: Merger of two firms never ends on the closing of the transaction nevertheless it ends when the firms are fully integrated. If well planned and executed, the merging companies should be supervised according to the targets and benchmarks recognised at the start.
Posted Date: 9/28/2012 3:06:15 AM | Location : United States







Related Discussions:- Constraints to successful merger integration, Assignment Help, Ask Question on Constraints to successful merger integration, Get Answer, Expert's Help, Constraints to successful merger integration Discussions

Write discussion on Constraints to successful merger integration
Your posts are moderated
Related Questions
Question 1 Explain the four basic varieties of layouts for manufacturing facilities Question 2 The major decision areas in supply chain management have both strategic and ope

T he change owner The change owner is the person assigned to essentially arrange and then make the approved changes to the system. The change owner is consulted about the foll

Whom do you think Rajender will eat with ?

QUESTION The unique social, economic and environmental characteristics of SIDS, such as high population density, relative isolation, limited availability of land space and pauc

Total Marks – 40 (Note: The information for this question is based on the material contained in Hopkins, Andrew (1999) Managing major hazards: the lessons of the Moura Mine Disast

North American Free T rade Agreement (NAFTA) It is a multilateral accord among the United States, Canada, and Mexico.  It is also preferred to as the (NAFTZ) North

QUESTION 1 Explain each of the following concepts- (a) PESTEL analysis of the macro-environment (b) Porter's five forces (c) Value chain analysis QUESTION 2 Th

Hi there i need help in case study assignment. Thanks

QUESTION a) Public sector projects are being resorted to on a public-private basis. Explain what is Public-Private-Partnership (PPP)? b) International financial institutions

Planning for negotiations  A complex negotiation requires specific planning to be successful. Without planning, a negotiator cannot possibly have the information required to ef