Management SummaryStern Stewart Research // Volume 62
Acquiring a company can generate or destroy a lot of value for an enterprise within a short period of time. That is why, in order to accomplish value-adding growth with the purchase, the transaction has to be strategically and specifically prepared, expertly executed and include extensive integration measures, so that all of the intended effects on earnings can be realized. It is important that the company’s organizational structure is not overtaxed by the deal, and that sufficient resources are made available. The management has to concentrate fully on the negotiations during the transaction, and the decisions relating to it. So a project team is required that is always in control of the situation and that monitors all the process steps and involved parties.
The following phases are generally involved in a transaction process, in order to accomplish its predefined corporate goals, and not to subsequently have to adjust the corporate goals to fit the transaction:
1. Identifying value and growth potential: In which parts of the company can value be generated through growth? 2. Prioritizing the investment opportunities: Which opportunities for growth can and should be realized? 3. Conducting the transaction: What steps have to be taken into account when executing the transaction? 4. Post-merger integration: How can the success of the transaction be ensured in the implementation phase?
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