The truth behind five M&A myths

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M&A – or Mergers and Acquisitions to explain the full title – is the name given to the process of consolidating companies or their assets through an array of financial transactions. It may be that two companies merge to form a new company or that one company takes over another. As with many things, many myths abound relating to M&A. Let’s have a look at five common misconceptions on this subject and set the record straight.

Table of Contents

Businesses are only for sale if they’re experiencing hardship

This isn’t always the case. In fact, selling a company while business is booming can often be a sensible decision, as it makes an attractive prospect to buyers.

You lose control of the business straight away

It may be a concern for a business owner that you’ll be giving away control of your business as soon as a transaction takes place. However, original business owners often remain involved, in order to oversee a smooth transition.

Job losses may occur

It’s not a given that job losses occur in the event of a merger or acquisition. While it’s possible that a restructure may need to take place to align with a new business strategy, a successful merger will often harness existing business assets, including staff. A London law firm such as https://www.forsters.co.uk/ can provide you with specialist legal advice on any aspect of staffing in this situation.

Acquisitions only happen to big businesses

This is another myth that surrounds acquisitions. In fact, SMEs are increasingly attractive to those businesses looking to expand or merge with another. They may offer greater potential for growth or a niche idea that hasn’t yet taken to the big stage, according to Business Sage.

Merging two business cultures is impossible

It may appear daunting at first if your business is merging with another – you may need to align with a new vision or be worried about cultural change. Good communication is key to a successful cultural merge – as well as proactive integration and due diligence.