Mergers, Acquisitions and Carve-outs: Reshaping for success
- initiative*magazine #14 :

At the time of writing, the COVID-19 crisis continues to put many businesses under great stress. For some, this was the last straw that broke the camel’s back. Others continue to fight for their existence. As a consequence, experts expect a surge in mergers and acquisitions. It’s going to be a buyer’s market.

This supports the all too familiar picture of M&A as a cold, money oriented, cut-throat activity. Big, rich companies swallow smaller, good natured but financially less successful, struggling firms – and couldn’t care less about the business they bought and the people that came along with it. A financial transaction, detached from the heart and soul of the organisation. This picture is prominent for a reason: It reflects common worst practices of M&A. These ventures obviously have a financial interest at their core. But so do all for profit businesses as well as all employees wishing to receive a pay check at the end of the month. There is nothing wrong with financial interests as such. It is the way this interest is pursued that makes the difference – not only for the people involved but also for the bottom line. Intriguingly, there is a correlation between people, performance and success still waiting to be fully leveraged.

This issue of the initiative magazine is dedicated to two changes of perception in regards to M&A. Firstly, in many instances, it provides an opportunity for a better business life not only from the perspective of shareholders but also for its dedicated and motivated workforce – if this dedication and motivation isn’t lost in the process. This brings about the second change of perspective: There is no conflict of interest between people and profit orientation as people drive profit. Herein lies a key opportunity or threat in regards to realising the business case behind the M&A venture that affects the bottom line result directly, positively or negatively.