The hottest successful M & a 27 early formulation

2022-08-05
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Successful M & a 2+7 early formulation of the integration plan

reduce the passivity and randomness of the acquisition plan

according to the tracking analysis and investigation of 115 M & A cases in the world by Kearney company, there are two stages with the highest risk of failure in the whole M & a process - one is the prior strategic planning, and what are the common failures of the target screen microcomputer controlled impact testing machine in the use process? What are the solutions to these common faults? The other is the integration stage after the merger. About 30% of the respondents believe that the pre acquisition planning stage is very critical. This part of the work is precisely what Chinese enterprises generally do not pay enough attention to at present

as we all know, whether it is M & A aiming at growth (most Chinese enterprises currently live in this type) or M & A aiming at cost reduction (the M & a mode of most western enterprises), the cost of M & A is usually higher than the market value of the acquired assets, that is, the acquirer must pay a premium to obtain the target assets. The premium is often based on the acquirer's evaluation of the synergy in the future, which requires the acquirer to do a lot of data analysis in advance, including strategic evaluation and business fitting. However, due to their own experience and ability, Chinese enterprises are more likely to passively participate in the negotiation from the very beginning. They often fail to make a comprehensive analysis of all possible alternatives and rush to bid. As a result, the determination of the acquisition target or scope is very random. This can not be said to be due to overconfidence (or overconfidence) and eagerness to lock in the target completion indicators (such as the internal schedule)

in this regard, experienced multinational enterprises have set a good example for Chinese enterprises. From the acquisition of Daewoo in Korea by general motors, a standard din16749 in which the German National Standard establishes the corresponding mold manufacturing tolerance for plastic parts tolerance, we can clearly see the strategic intention of General Motors and the careful planning to achieve its strategic objectives. As a result, General Motors obtained the core assets of Daewoo at the most reasonable price. Although the whole process is much longer than the original plan, GM obviously knows how to use time and patience

early formulation of post merger integration plan

Kearney's analysis of 115 global M & A cases shows that about 60% of M & A actually damaged shareholders' rights and interests. After three years of M & A, the profit margin of new enterprises decreased by an average of 10 percentage points. In the United States, 50% of M & as were considered to have failed four years later. It can be seen that the proportion of M & A failures is very high. In addition to the above lack of strategic plan, the most important factor is the lack of perfect planning and implementation of post merger integration (PMI)

many Chinese enterprises have always paid little attention to the integration after mergers and acquisitions. It seems that the task has been completed after the delivery of property rights. This can be seen from many M & A cases involving domestic enterprises. In addition, it is an indisputable fact that domestic enterprises usually do not respect the seriousness of the plan. It is not only necessary but also indecisive to formulate a thorough and detailed post merger integration plan. According to the experience of Kearney company, the time factor is also an important factor determining the success or failure of mergers and acquisitions. Kearney's research shows that in unsuccessful M & A cases, 72% of the enterprises have not formed a clear integration strategic plan for the acquired enterprises at the end of the transaction, and more than 60% of the enterprises have not been able to set up a senior management team at the end of the transaction, and there is a strong causal relationship between the delay in planning and implementation and the failure of M & A. this alone is enough to remind us that Chinese acquiring enterprises should pay attention to the planning of PMI, In addition, it is necessary to plan ahead and not wait until the end of the transaction, let alone drag this important work into the integration period, because this will not only delay the best integration opportunity, but also cause confusion and mistrust in the acquired enterprises

seven strategies for successful M & a

based on the analysis of major global M & A cases, Kearney company has summarized seven strategies for successful M & A. It is the successful implementation of these strategies that greatly improves the probability of successful M & A of enterprises:

formulate clear plans and strategies: enterprise planning is the basis of comprehensive M & A integration and guides the formulation of all tactical decisions. Although this process will be complicated. For example, the merger and acquisition plan of pharmaceutical companies SmithKline and Beecham took several months to complete, but the results were amazing - in the five years after the merger, smithklinebeecham's sales increased by 40%, and its operating profit increased by 60%

determine the management level as soon as possible: if the management team cannot be established as soon as possible, it will undoubtedly lead to confusion. As everyone's responsibilities are not determined, it is more likely to cause misunderstanding in communication. Therefore, the enterprise should act quickly to avoid speculation and confusion. Kearney's suggestion is that the top leadership should be in place in the first week after the completion of the M & A, and the next three weeks should decide on the best management method and formulate the objectives for the implementation of the plan, and in the first month, designate the management team of the first layer that describes in detail the structure of the insulation system in combination with the diagram in the specification. For example, aseaab of Sweden and brownboveri of Switzerland, the two companies that make up abb, an engineering company, completed 500 management appointments in the first three months after the merger, ensuring the smooth progress of the post merger integration

evaluate and give play to synergies in a realistic way: any company that pays a high premium for the acquisition must be able to clearly understand the specific value source of the acquisition and determine the focus. The source of value changes due to different reasons for M & A. some enterprises strive to acquire or provide functional skills to enhance the competitiveness of the enterprises after M & A. some enterprises pursue strategic advantages through rationalization of production lines, distribution and operation. The merger and acquisition between Daimler and Chrysler did not create specific value as expected. A considerable part of the reason is that the original estimate of synergy was too optimistic. As a result, the market value of the two companies after merger is only equivalent to the original market value of Daimler, which has brought huge losses to shareholders

develop and realize the target product of "quick win" and increase the average sales price by 15%: those excellent new M & A enterprises usually inject a sense of security into the enterprise by formulating and realizing the goal of early victory. The common mistake is to simply take "personnel cost reduction" as the goal of "quick win", which may result in the loss of the best employees in the acquired enterprises. Another area that is easy to be ignored is the communication with core customers. How to timely communicate the significance of M & A to key customers and alleviate customers' concerns should become the main task of "quick win". According to Colney's experience

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