{"id":8588,"date":"2024-09-22T13:39:32","date_gmt":"2024-09-22T13:39:32","guid":{"rendered":"https:\/\/www.valuwit.com\/?p=8588"},"modified":"2024-12-15T16:55:46","modified_gmt":"2024-12-15T13:55:46","slug":"ma-merger-acquisition-strategy","status":"publish","type":"post","link":"https:\/\/www.valuwit.com\/ar\/ma-merger-acquisition-strategy\/","title":{"rendered":"Before the Decision: 10 Steps to Developing an M&A Strategy"},"content":{"rendered":"
It\u2019s perhaps one of the best methods to address multiple issues in a given business, especially in a fast-growing market such as that of the Middle East; Mergers and Acquisitions (M&A) have gained popularity as a powerful tool to enhance a given company’s stability and market position.\u00a0<\/span><\/p>\n M&As can help corporations scale, stabilize competition, reduce production or distribution costs, expand their reach, diversify their portfolio, acquire technology, and capitalize on synergies. However, the success of any M&A endeavor hinges on a well-crafted strategy, one that\u2019s designed to achieve the company\u2019s long-term vision.\u00a0<\/span><\/p>\n Setting a clear M&A strategy is the first step to a framework that guides decisions throughout the entire process and ensures that each move aligns with set goals.<\/span><\/p>\n Larger M&A deals with flashy PRs tend to get the biggest headlines; however, consistent small-scale acquisitions\u2014or Programmatic M&As\u2014are proven to have a stronger impact, according to global research house <\/span>McKinsey<\/span><\/a>.\u00a0<\/span><\/p>\n Smaller acquisitions, when pursued as part of a deliberate and systematic M&A program, tend to yield higher returns over the long run with comparatively low risk. McKinsey\u2019s research paper explains, \u201cCompanies\u2019 ability to successfully manage these deals can be a central factor in their ability to withstand economic shocks.\u201d<\/span><\/p>\n M&As are best viewed as a spectrum, where one end is a company completely absorbing the other, while on the other end two relatively equal entities joining forces. In reality, however, the latter rarely happens. Usually, one entity has some degree of an upper hand during the M&A negotiation process.<\/span><\/p>\n There are four primary types of M&As, which can be categorized based on the nature of the deal negotiated and the relationship between the businesses involved.\u00a0 Each of these categories can be spun off into myriad other types.<\/span><\/p>\n These steps are derived from VALUWIT’s <\/span>M&A strategy consulting projects <\/span><\/a>and represent a condensed overview of its process.<\/span><\/p>\n This initial step sets the foundation for the entire M&A process. Given its importance, it involves several layers of steps. The first of which is the definition of objectives and the key reason behind seeking a merger or acquisition.<\/span><\/p>\n The second phase focuses on the assessment of the company’s current position. This includes assessing the business\u2019 worth, and conducting financial, legal, IT, and HR due diligence,<\/span><\/p>\n Third comes strategy specifics, such as establishing the target company\u2019s details including position, technology, human capital, reach, and range of worth, all of which are aspects that design the target search.<\/span><\/p>\n Next comes planning for the implementation, steps include defining an outreach strategy, establishing working groups, agreeing on goals and timelines, identifying stakeholder benefits, and developing an internal communication strategy.<\/span><\/p>\n The fifth step involves creating a preliminary business plan including SWOT analysis and risk assessment.<\/span><\/p>\n Once the strategy is in place, the focus shifts to identifying and evaluating potential acquisition targets.\u00a0<\/span><\/p>\n This stage encompasses developing criteria for target selection; identifying potential targets; creating and evaluating a long list of candidates; narrowing down to a short list of the most promising targets.<\/span><\/p>\n This critical phase is divided into two main steps. The first is validation, which involves the assessment of the desirability of the deal through analysis of the market benefit potential, internal valuation, and market context analysis.<\/span><\/p>\n Next comes evaluating the M&A\u2019s achievability through conducting market valuation, tactical evaluation, and managing investor relations.<\/span><\/p>\n Secondly comes execution, which focuses on market considerations such as deal strategy, organizational structure, market operations, and financing.<\/span><\/p>\nProgrammatic M&As vs large M&As<\/b><\/h2>\n
Types of M&As<\/b><\/h2>\n
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M&A strategy framework<\/b><\/h2>\n
1 – M&A strategy setting<\/b><\/h3>\n
2- Target screening\u00a0<\/b><\/h3>\n
3- In-depth analysis<\/b><\/h3>\n