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2 things that could scuttle a merger or acquisition

On Behalf of | Mar 24, 2022 | Business & Commercial Law |

Mergers and acquisitions provide an important way for ambitious companies to further their growth. The problem is that the vast majority end in failure.

Understanding some of the common pitfalls before you make a decision can help to ensure you make the correct choices.

  1. Losing key staff

If your success relies heavily on a few key individuals, you need to take great care to keep them. The same goes for the other company. Potential business changes can create a lot of uncertainty and fear among employees, and the in-demand ones may not hang around to see if it all pans out.

Reassuring staff will be crucial. Even if you intend to keep someone, they may have doubts about their future role, so the more reassurance and information you can give them from the outset, the better your chance of retaining them.

  1. Cultural clashes

More and more employees are looking to work for companies aligned with their values. If someone is working for you, your culture may be part of why they stay. They may enjoy the family atmosphere and flexibility, even if they know they could earn far more by moving to a more corporate competitor. If you then change to become that corporate competitor, you might find their loyalty lost.

Those are just two of the things to be aware of. They are things that fall outside the scope of usual due diligence. Yet, understanding these factors is just as crucial as understanding all the financial and legal matters involved. Getting help to ensure you fully assess any potential merger or acquisition can help yours become one of the few that succeeds.