Mergers & Acquisitions Checklist

by Frank Girard; Updated September 26, 2017
Successfully merging two companies requires a well thought out, structured approach.

Merging two companies can be challenging. Each firm likely has different support systems, corporate cultures and overlapping, incompatible job positions. A checklist is useful to prevent managers from overlooking critical areas so they can complete the merger and acquisition efficiently.

Search

Companies seek other firms to merge with for such reasons as accessing new markets, defending market share and acquiring added resources such as capital, customers and personnel. Before searching for a company to acquire, a company must clearly identify the goals of the acquisition, what type of company would be a good fit and what conditions must be met for the acquisition to be pursued.

Due Diligence

Once a potential merger candidate is found, in-depth due diligence must occur. Financial records should be closely examined to help put a value on the acquisition. Customers should be interviewed to determine what kind of good will there is the marketplace. A background check on the company and its senior executives should be conducted.

Negotiation

Both the acquired and acquiring company must be open and willing to negotiate if they both have a serious interest in the merger. The acquiring company should not be locked into stated rules and guidelines. Before making an offer to the company being acquired, the acquiring company should ask how much the company to be acquired wants to be paid.

Implementation

Assemble an acquisition team representing key business functions, such as operations, marketing and finance. The group should develop an implementation plan to define key activities and responsibilities for merging the two companies. For example, the people responsible for integrating computer systems at both companies need to coordinate the merging of data and computer hardware from each company. A decision must be made about the handling and merging of employee benefits between the two companies.

Warnings

When pursuing a potential company to acquire, be prepared for surprises and have a contingency plan in place. Key executives may decide to leave the company. If not funded internally, financing sources may suddenly become unavailable. The media may cover the planned merger before the merger has been completed. Be flexible and adaptable as progress is made in merging the two companies. Be prepared to walk away from a potential merger if new facts are discovered that could jeopardize its success.

About the Author

Frank Girard is a copywriter and marketing consultant who has been working in the field since 1995. He has published ebooks, including "How to Succeed as a Freelance Marketing Consultant" and "101 Questions and Answers About Internet Marketing." Girard provides freelance copywriting work for clients around the country. He has a Bachelor of Arts in communications from the University of North Carolina.

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