Mergers and acquisitions

What can go wrong with a merger or acquisition?

Guide

The extent and quality of the planning and research you do before a merger or acquisition deal will largely determine the outcome. Sometimes situations outside your control will arise and you may find it useful to consider and prepare for these risks.

What are the pitfalls of mergers and acquisitions?

  • An acquisition could become expensive if you end up in a bidding war where other parties are equally determined to buy the target business.
  • A merger could become expensive if you cannot agree terms such as who will run the combined business or how long the other owner will remain involved in the business.

Both mergers and acquisitions can damage your own business performance because of time spent on the deal and a mood of uncertainty.

You may also face pitfalls following a deal such as:

  • the target business does not do as well as expected
  • the costs you expected to save do not materialise
  • key people leave
  • incompatible business cultures
  • resources being diverted from your business' main aims

Getting advice advice about mergers and acquisitions

Get expert advice from professionals, such as management accountants and solicitors, with experience in similar deals to help forecast potential pitfalls and to address any that arise.

Read about making mergers work, see joint ventures and business partnerships.