Controlling the M&A Story

Rumours will typically run wild when M&A is on the horizon, which can create an atmosphere of fear and unsettling instability within an organisation. We take a look at the challenges facing businesses when trying to keep a potential deal under wraps, why timing is everything when it comes to a deal announcement and the tactics businesses can use when controlling their M&A story.

Challenges

Maintaining confidentiality while negotiating an M&A deal is essential not only to ensure success and achieve the best price possible, but also to maintain profit margins, and to reassure employees, creditors and suppliers who may become nervous if word of a sale leaks out. Confidentiality should be maintained throughout the core business operations, within the market, and among competitors, clients (both existing and potential) and customers.

However, a balance needs to be struck between ensuring that no information is leaked, either inadvertently or deliberately, and the potential buyer having the necessary data to make an informed decision. Leaks can and do occur but every effort must be taken to minimise them.

Timing Is Everything

As in many walks of life, timing really does matter when it comes to deal announcements. Some deals can be completed within a matter of weeks, others, due to regulatory processes or other obstacles, can take months or even years. The longer it takes to get a deal done, the more opportunities there are for things to go wrong; information can leak out, share prices can suffer, and ultimately the whole negotiation process can fall apart. In order to maximise overall merger gains, the timing of the announcement needs to satisfy both parties and must be agreed on beforehand.

Tactics

In order to control the M&A story, avoid embarrassing and costly leaks and enhance favourability among the markets the announcement of a deal needs to be handled sensitively. The deal announcement, prior to completion, signifies the intention of the two parties to agree to a merger and serves as a statement of intent, alerting all those affected as to how rapidly the deal will be completed and how it will affect them.

The completion of the deal, which can occur weeks or months after the announcement, needs to be dealt with in a highly- professional manner, with external communications involving a media campaign and complementary social media, and will require awareness that there may be significant interest from the media, if the deal is notable. By taking ownership of the announcement, companies can influence the flow of information and present the facts to avoid speculation and any potential damage to share price in the immediate aftermath.

With key market knowledge and experience working across a wide range of sectors and representation throughout the Americas, Europe, Africa and Asia, Benchmark International can connect you with the right opportunity. To find out more, visit http://www.benchmarkcorporate.com

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