M&A Strategy
Mergers and acquisitions give you the ability to fast-track your company’s growth in a new market. However, it is also a challenging and time-consuming activity, with deals more often than not falling through. Creating a robust M&A strategy is therefore a crucial step before you start identifying targets in a market. ARC Consulting can help you understand and design your strategy, which will provide you the tools for a successful deal.
A successful merger or acquisition is based on achieving a valuable objective – the strategic rationale. While there are many different rationales for conducting a merger or acquisition, it is important that you have a clear understanding of your own strategy and goals before proceeding. Based on your companies’ specific goals, various rationales will be evaluated, but below we have included six key rationales.
Strategic Rationales for Conducting a Merger or Acquisition
Improving Financial Performance
Often, mergers and acquisitions are conducted just to improve the overall financial performance of the company by cutting costs, increase value, and increase growth.
Acquire Know-How & Technologies
Sometimes, acquiring a company is less expensive and faster compared to developing technology in-house. This is particularly common in the IT and tech-sectors.
Improve Time to Market
Often seen when larger companies acquire smaller, more technology advanced companies, to utilize its existing sales force to push a new product out on the market.
Geographical Expansion
Acquiring companies in new markets enables a fast market entry and geographical expansion. ARC Consulting have extensive experience supporting companies with cross-border deals in Asia.
Vertical Integration
By integrating companies in your value chain, companies can secure stability to a greater extent. For example, a factory that acquires a raw material supplier to ensure a stable flow of raw material for the production.
Reduce Risks
By growing your company through a merger and acquisition, you are able to spread risk and diversify your market presence. For example, if you current production faces production halts due to uncontrollable events (such as natural disasters or virus pandemics).
