Risk management in a merger/acquisition project

Angela L.

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Risk management in a merger/acquisition project

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Themes

Merger, acquisition, company, absorbed company, employees, merger by absorption, merger by creation, transfer strategy, success factors, contact, offer, risk management, human factor, corporate culture, intercultural management, human resources, ethics, values, collective agreement corporate culture

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Abstract

The economic context has changed radically in the space of a few years, whether due to globalization or the technological innovations that have appeared and that now dominate the business world. More recently, the health crisis has impacted the entire economy and caused numerous malfunctions and damage to businesses. Many markets find themselves saturated, and managers want to find a way to make their business sustainable and cope with these multiple changes, which change both their way of working and the behavior of employees. The most important thing today for companies seems to be able to fight against the ever fiercer competition, whatever the sector of activity. Mergers and acquisitions are a factor that dominates many very large multinationals in all countries. Regardless of the sector, astronomical sums are traded on various markets every year.

The theoretical foundations
1. Definitions
2. The challenges and objectives of M/A
The realization of a M/A
1. The different steps
2. Identification and management of risks related to the M/A project
The human factor at the heart of M/A
1. The importance of corporate culture
2. Risks related to the human factor
Towards M/A success: managing the human factor
1. Staff involvement and communication on a common project
2. Intercultural management
3. Key role of human resources

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[...] This will give them time to get used to it, and the transition will be less complex. Communication is, therefore, in this specific case, just as important as the problems caused by non-communication. Establishing intercultural management also increases the confidence of employees, their performance, their involvement, but also their competitiveness. In addition, it also improves the integration of new employees and reduces the margins of error related to the problems of cultural differences. C. Key role of human resources Human resources are a function that has evolved a lot over the years. [...]

[...] Conclusion Managing the risks inherent in a merger/acquisition project is, therefore, essential to ensure its long-term success. Indeed, this type of project very often fails, and this is linked to poor management of these risks and the omission of certain essential factors, such as the human factor, in particular. However, M/A is today a significant growth lever for companies that find themselves in difficulty, or all those who want to diversify or, on the contrary, refocus their activities. However, the cultural differences that mergers/acquisitions can cause can also be disturbing because they call into question a large number of achievements, such as everything concerning the management or the general organization of the group. [...]

[...] In the second part, we will talk about the realization of a merger/acquisition, also carried under the acronym M/A. What are the different stages, and how to identify and manage the risks of such a project? A third part will deal further with the human factor, with the importance of corporate culture and the risks associated with the human aspect in a project of this scale. Finally, the fourth and last part will talk about the success of the project. [...]

[...] Thus, companies based in France are subject to the Sapin II law. Companies have more obligations, which are more binding but also more relevant in terms of the security of the merger. Finally, note that the stock market factor must be considered because it is a question of taking into account the evolution of the financial markets. The negotiation phase is often very fast, because companies are subject to very strong competition in all sectors and, in the end, few people are involved in the process and all of the decision-making. [...]

[...] It is important today more than ever with the current context to understand that the well-being of employees is a condition for the success of the company. B. Intercultural management Today, the business world must be more open to cultural differences. Indeed, in many respects, cultural diversity is wealth, a strength for companies, but it can, however, lead to dysfunctions or conflicts between employees and at the same time impact the efficiency of each one as well as the overall performance of the newly incorporated company. [...]

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