When two different companies merge into one, there are clearly always going to be a wide range of issues that need resolving in the first instance, and more generally things that you are going to have to think about in order to make sure that it all goes as smoothly as possible. Done right, a merger can work out well enough, and it is obviously something that is done so that the business in question can ultimately improve. But you do need to be aware of some major factors first, just to make sure that you are approaching it in the right way. Let’s take a look at some of the things that you might need to know about business mergers.
The Reason
There needs to be a strong reason behind the merger, otherwise you might want to ask why you are thinking of doing it at all. That reason is very often financial, or it might be a mere case of hoping to scale a business or even improve your market share in a certain area. Maybe you are even hoping to eliminate a competitor. Whatever the reason, be clear on it, as this will help to drive your merger and make it more successful.
Examining Accounts
Before the merger, you have to take due diligence to ensure that you are going to be merging with a company that is going to do you well, rather than one that will do your business any harm. There are many things to consider as part of this process, including company accounts – for which you might want the help of business mergers accountants – and customer base, along with sales figures and technology. The more that you research, the better a position you will be in, and the better sense of what you are looking forward to you will have.
Assets
You will also want to check out the assets of the business that you are due to merge with, as this is going to say a lot about the kind of value that you can hope to get out of the process. If they don’t have a lot in the way of assets, then you will find that you are going to struggle to make it all work, and that it is much less financially viable in general. The assets, whether tangible or intangible, should be clear and should be one of the major things that you investigate when you are merging with another business.
Liabilities
At the same time, try to be aware of any potential liabilities posed by the merger, in particular any that you feel your merging company might have that could affect yours. This includes debts, taxes, employee salaries, contractual obligations, and anything else of the same kind that might have some kind of an impact. The more aware you are of that, the more likely it is that you can merge safely and effectively with the other business.
Done right, a merger can be wonderful, so it is certainly something you are going to want to consider.
