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Reasons For Many Merger and Acquisition Failures

A merger or acquisition can fail for a wide variety of reasons at any point during the entire process. The most common reasons:

– Laws prevent the transaction
– Negotiations fail
– Execution failures occur

Problems often happen because of conflicting expectations, cultures, technologies and personalities. Additionally, worker resignations result in production slowdown and sudden costly hiring searches.

How to Make the Process a Success

Both parties can achieve success by remembering two key details:

– Decision-makers that treat the process like a project and pre-define methodologies for it from the start have a higher chance of success.
– Those that carefully plan out their part of the process in detail and make contingency plans are better positioned to succeed.

Both parties must also be aware of common scenarios and obstacles, including:

– Higher costs: Budget and monitoring plans prevent new expenses from harming either company.
– Partial truths: Honest and open discussions about expectations are necessary to prevent communication breakdowns between parties and their partners, employees, vendors and customers.
– Incompatible systems: Systems critical to the functioning of both companies, such as policies, production processes and technologies, must be merged in ways that prevent delays or disruptions that can result in financial and/or reputation losses for the merged entity.

The advice of a business consultant or attorney is necessary for making certain that the new entity has better operations, higher profits and a greater market presence. For more information about Coachella Valley mergers and acquisitions, contact us today!

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