Successfully implement M & A projects
In the medium term, everyone is waiting for the “7th M&A wave”. Currently, there is an M&A traffic jam. Overall, “cross-border M&As” are growing in importance. Established strategic investors dominate the market compared to private equity. The U.S. is gearing up for increased acquisitions into Europe and emerging regions. For their part, emerging markets are more frequently attacking targets in Europe, taking an increasingly strategic approach in order to achieve leading global market positions. Germany is thus once again giving away entire industries, such as the solar sector. We have to keep up with the ongoing global consolidation, otherwise we will lose touch.
M&A requires different competencies than continuity management of the incumbent business. And additional capacity is required, especially in the implementation phase after closing. To that extent, it’s about the ways in which competencies and capacities are built up or procured externally. Experience shows that external lawyers, auditors and tax advisors are used in sufficient numbers during the transaction phase. The transaction also usually runs successfully. Critical is the preliminary phase with strategy development and especially the implementation phase after closing.
Small and medium-sized companies often make the mistake of not having a sufficiently robust strategy and planning for the M&A project. Here we need to invest more in strategy work. The implementation phase must be planned at an early stage. If there are not enough competent people on board, then external consultants should be brought in. For the implementation phase of a “normal” acquisition (medium positive industry return), 5% of the purchase price should be calculated in costs for internal or external consultants.
The concept of thinking in terms of end-to-end processes alone is a major advantage over a classic “relay race” , i.e. passing the project from one specialist to another without end-to-end responsibility. We are dealing with three core processes in M&A that should be actively involved from start to finish: (1) the strategy development and planning process with main focus at the beginning of the project , (2) the dealmaking process with main focus in the transaction phase and the (3) implementation process with main focus in the execution phase. However, M&A is becoming increasingly complex. This is often related to the increasingly distant and cross-border regions in which M&A takes place. With ever more complicated transaction models as well as ever higher legal requirements, for example compliance. In our book “Leading M&A Projects Successfully”, all areas and processes are juxtaposed for the first time. The table of contents can already be used like a checklist for the to-do’s. Because of the highly condensed contributions, the book is designed as a guide especially for executives.