August 12, 2020 is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

Articles for Entrepreneurs


Mergers and Acquisitions


Merger Success Factors

So your firm is merging with another firm. Although the union of your two companies may be challenging, following these merger success factors will help you make the most of the marriage. Ignore them and you may soon regret your decision to get hitched in the first place.

You explored your options and decided that a merger is your company's next step.
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That great, but don't get too excited just yet. Mergers don't always have happy endings. In fact, sometimes a merger can be the downfall of two otherwise promising businesses.

The difference between a successful merger and a total bust often boils down to the amount of thought you've given to the company's post-merger reality. If the merger is part of a well-designed strategy, its chance of success will be high. If not, the post merger company will face some difficult challenges.

To keep your merger on track, here are some of the merger success factors you'll need to consider:

  • Examine your motives. Successful mergers are built on a foundation of right motives. If your motivation is vanity or the desire to lead a large company, there will be a tendency to overlook warning signs that the merger may not be a viable business decision.
  • Be obsessive about planning & strategy. The time you invest in planning and strategy now will pay off during the critical first months that follow the merger – even if the merger is your exit strategy. Planning clarifies everyone's role in the post-merger environment of the company and creates assurances that the consolidated business is positioned to thrive on a go-forward basis.
  • Centralize operations quickly. After the merger has been finalized, don't waste any time in centralizing operations and leadership functions. The sooner employees and customers can see visible signs of consolidation, the more confident they will be in the company and its products . . . Not to mention the fact that decentralized operations are a headache you probably aren't ready to deal with at this stage of the game.
  • Hire strong administrators. Early on, the newly formed company is going to require strong, results-oriented administrators. Until the new company develops its own culture and personality, employees will be tempted to fall back into the patterns and processes that were standard when there were two different companies. Eventually, these folks will adapt or disappear – but in the short term, you'll need leaders who are skilled at keeping your workforce focused on the task at hand.

Related Articles

Want to learn more about this topic? If so, you will enjoy these articles:

Venture Capital As A Prelude to Acquisition
The Role of Synergy in Mergers and Acquisitions
Reasons Why Many Mergers and Acquisitions Fail

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