© Copyright Acquisition International 2023 - All Rights Reserved.

Article Image - What are the Potential Issues with Mergers and Acquisitions?
Posted 28th November 2022

What are the Potential Issues with Mergers and Acquisitions?

When two companies combine, it can help the new entity boost its market share and profits. The two main ways of achieving this are through mergers and acquisitions. Mergers occur when separate companies combine to form one company.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

What are the Potential Issues with Mergers and Acquisitions?

When two companies combine, it can help the new entity boost its market share and profits. The two main ways of achieving this are through mergers and acquisitions. Mergers occur when separate companies combine to form one company. While an acquisition is the takeover of one company by another. There are many complications that can occur during this process, which is why you should always seek expert advice from specialists in mergers and acquisitions. Below, we explore some of the potential issues you might encounter.

Overpaying

One of the most common issues is that you overpay during the merger or acquisition. Calculating a valuation for a business is complex work and involves projections and estimations that might not be accurate – especially when the business you’re buying won’t tell you if you’re overpaying. One way to try and avoid this is by being conservative with your offers: set yourself a suitable value for your acquisition target as a limit rather than an aim. This can ensure that you don’t overspend.

Incomplete due diligence

During the acquisition or merger process, it’s vital that you investigate your target in forensic detail. Incomplete due diligence can result in your missing a crucial detail that comes back to haunt you. To avoid any mishaps, you should ensure a complete check is carried out beforehand and that you have the appropriate seller representations and warranties documented in your agreement.

Staff retention

Even once an acquisition or merger has gone through, there are potential issues that can arise. Staff retention is one area you should prioritise. You’ll need to quickly structure the business in a way that boosts staff morale and retains the best talent in the business. Employees can often feel under threat following a merger or acquisition. You should allay fears by communicating clearly with employees and by building trust. By improving morale in your business, you can boost productivity and staff retention.

Security threats

Mergers and acquisitions can also present security threats to your business. To complete the deal, both parties will be sharing sensitive information. The danger here is that a cyberattack could leave this confidential information vulnerable. Meanwhile, if you don’t have a security plan in place or the right training for your staff, you could end up with crucial data leaks. During the process, you should prioritise your data security to ensure that all parties remain safe during a merger or acquisition.

Mergers and acquisitions can prove to be incredibly beneficial, but they’re also complex to finalise. But by prioritising avoiding the issues above, you’ll be in an excellent position to try and complete a smooth deal.

Categories: M&A, News


You Might Also Like
Read Full PostRead - Eye Icon
Understanding the Evolving Landscape of Asset Management in the Financial Industry
Finance
18/09/2023Understanding the Evolving Landscape of Asset Management in the Financial Industry

Like most industries, the financial sector has had major evolutions, and asset management plays a huge role. This evolution has reshaped how financial assets are cultivated, optimised, and safeguarded. It has ultimately redefined the relationships between asse

Read Full PostRead - Eye Icon
Space Industry: An Investment Guide for Entrepreneurs
News
02/10/2023Space Industry: An Investment Guide for Entrepreneurs

As space exploration continues to captivate the world’s imagination, being a part of this journey offers the chance to contribute to the progress of humanity’s cosmic frontiers and potentially reap the rewards of this innovative market.  In th

Read Full PostRead - Eye Icon
Best Private Asset Broking Firm 2022 – United Kingdom
M&A
25/04/2023Best Private Asset Broking Firm 2022 – United Kingdom

Fraser Coutts & Partners is a multi-award-winning specialist private international brokerage and advisory boutique working in the real assets space. Its founder, Fraser Coutts, is an economist, business advisor, and deal broker with over 25 years of experience

Read Full PostRead - Eye Icon
How can E-Commerce Businesses Optimise their Sales on the Amazon Marketplace?
News
04/07/2022How can E-Commerce Businesses Optimise their Sales on the Amazon Marketplace?

Over the last few years, e-commerce businesses worldwide have seen a drastic shift in the shopping habits of their online customer base. Most of these changes are because of the Coronavirus pandemic, which saw more and more people turn towards online shopping

Read Full PostRead - Eye Icon
Essential eCommerce Features for Major Growth
Strategy
06/11/2020Essential eCommerce Features for Major Growth

With the right strategies, you can give your eCommerce business the best chance of success regardless of the circumstances. A mixture of customer loyalty, building a modern eCommerce website and focusing on long-term marketing efforts has proven to work for ot

Read Full PostRead - Eye Icon
‘Advice Gap’ Revealed as More Than Half of British Adults Fail to Seek Financial Help
Finance
26/03/2015‘Advice Gap’ Revealed as More Than Half of British Adults Fail to Seek Financial Help

A majority of British adults are falling through an 'advice gap' by not making use of financial advisers, according to new research from unbiased.co.uk and MetLife.

Read Full PostRead - Eye Icon
Virtusa Completes Acquisition of Majority Interest in Polaris Consulting & Services, Ltd
M&A
03/03/2016Virtusa Completes Acquisition of Majority Interest in Polaris Consulting & Services, Ltd

Virtusa Corporation (NASDAQ GS:VRTU) today announced that its India subsidiary, Virtusa Consulting Services Private Limited, has acquired all of the outstanding shares of Polaris Consulting & Services, Ltd.

Read Full PostRead - Eye Icon
A Highly Acclaimed Medico-Legal Expert
Finance
26/06/2017A Highly Acclaimed Medico-Legal Expert

Professor J Peter A Lodge, winner of the Most Highly Regarded Expert Witnesses 2017 from the UK, is a consultant surgeon based at Leeds Teaching Hospitals NHS Trust, West Yorkshire. He also has a busy, thriving private practice at Spire Leeds Hospital where he

Read Full PostRead - Eye Icon
Falcon Certified Public Accountants – Soaring Above the Competition
Finance
04/01/2017Falcon Certified Public Accountants – Soaring Above the Competition

Falcon Certified Public Accountants Ltd., registered with the Hong Kong Institute of Certified Public Accountants, specialises in providing audit, tax and corporate advisory services to a wide range of clients. Founder Gilbert Loke talks us through the firm an



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow