A Case for Mergers and Acquisitions

Mergers and acquisitions are incessant in this age and are a significant business decision. As such, they should be undertaken with sharp business acumen, careful thought, and skillfully crafted strategy. Ron Pragides on Medium provides an imagery of what is involved in leading a company. He compares it to a game of chess with tactical moves on the chessboard and a long-term strategy that determines the winner.

Mergers and acquisitions should be contemplated as a part of your company’s corporate strategy as your company scales upward and grows in scope. In order to be strategic, you should refrain from asking what you can acquire, as this is equivalent to a solution seeking a problem and will lead you to aim at your business’s entire ecosystem. Aiming at your entire ecosystem is contrary to being a strategy. It is like “scanning the entire chessboard for pieces to capture, without considering subsequent moves by you and your opponent.” Rather, start by defining your comprehensive corporate strategy; that is, where you want to see your company in increments of one, three, and five years, etcetera. In doing this, consider your product capabilities, market and brand positioning, team and technical competencies, and sales and distribution channels.

Think of acquisitions only after defining the desired future status of your company. Set your destination in 12-, 36-, and 60-month increments, then consider whether it’s best to build, buy, or partner in order to achieve your desired results. Imagine the way you wish the chessboard to look and work backwards to find your strategic moves. Buying could be your best move.

Acquisitions require a lot of time to negotiate and are costly. They are not a panacea; the work involved can take up to six months before you start to see the benefits. Expect some complications. Tilt the odds of success in your favour by performing thorough due diligence on the company you hope to acquire. Think through all the possibilities and embrace the vision.

Become a more effective merger and acquisition strategist by taking the Business Strategy certificate program offered by Genashtim, in collaboration with eCornell.

eCornell courses are approved by SkillsFuture Singapore for SkillsFuture Credit as well as by HRDF Malaysia under its SBL Scheme.