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is undervalued does not use its assets to maximum effect would benefit from relocation has poor management has managers who want to leave or retire has complementary products or services which, when combined with yours, will enhance the offering to customers

Assess the likely interests and motivations of the individual shareholders in order to determine whom best to approach at the target company. Choose your timing carefully so that the approach will be given proper consideration. Decide who should make the initial approach on behalf of your company, whether you should use your corporate finance advisers or a member of the board or another third party who knows the target company.

Present the strategic rationale for the proposed acquisition to the target company in the right light, emphasising key intangible benefits such as cultural fit. Persuade the target company that you are only prepared to conduct discussions on an exclusive basis and that you will terminate discussions if another party enters into talks with the target company.

Be prepared however. Assess the likely identity of any potential competing bidders, their key selling points and motivations and address these in your own continued selling to the incumbent management team and shareholders. Maintain a good relationship. Having an intermediary between yourself and a potential purchaser can help take the heat out of points in the negotiations that might otherwise become confrontational. Using a corporate finance adviser also helps maintain confidentiality, which is often crucial to protect your business and that of the target company.

Assess how best to structure the acquisition proposal, both in financial terms and in other soft areas and negotiate the best deal. he main agreement as to price e.g. in terms of cash, shares or loan note payments, including details of any earn-out or other forms of variable or deferred payments. A clause providing that you will be given a period of exclusivity (for, say, two months) during which the sellers agree not to discuss or negotiate a sale with any other potential purchaser. Details of any non-competition restrictions to be entered into by the sellers in relation to a period of time following completion of the sale.

Post Merger Issues

Integration in Mergers
Is all about make him like me

Is one of the most complex tasks in the process

Dealing with acquisitions of resources and liabilities and integration of various processes is critical for the survival of the new organization Has the potential to enhance shareholders value by creating cost

advantages, increase in revenue, increase in market power and/or

intangible synergies, etc.

Integration in Mergers
Managing of multiple cultures Innovating Building new teams and Managing a complex change process.

Activities common to M & A

Demonstrating a committed and open-minded leadership Building teams and work units Focusing on financial and strategic objectives

Remaining flexible
Providing for capable and motivated teams Assimilating new people and achieving cultural integration

Challenges faced in Integration Process

Getting employees to embrace change

Sharing information and effecting corporate understanding Effecting and cooperation Setting priorities Combining corporate functions and internal processes and

Measuring results

Issues faced in Integration

Failure to align leadership, management, and supervisory practices with the new combination's core values Absence or lack of guidance about managing the "people factor" in order to maintain productivity and job satisfaction Failure to facilitate multi-directional knowledge transfer and organizational learning within the new combination Failure to redesign core work processes in a way that involves the employees Failure in the selection of appropriate personnel for crossborder and cross-unit assignments

Issues faced in Integration

Lack of global competencies in key managers and supervisors Failure to re-conceptualize performance management and career

Failure to align differing benefits and compensation packages Failure to facilitate the productivity of geographically dispersed "virtual" teams Slow decision making process Failure to provide coaching or mentoring to their subordinates

Tools of Integration
Communication of the new strategic objectives and the new vision of the merged organization. Implementation of a new shared corporate culture and management culture Development of a new management structure for the new, larger organization especially overcoming of leadership problems in very large units Bringing together formerly separate units from both former organizations Harmonization of management compensation and management incentive systems

Tools of Integration
Overcoming of language barriers and country specific cultural differences Overcoming of staffs suspiciousness of the other organization - Us vs. Them syndrome Filling of management positions Allocation of responsibilities Knowledge transfer among units that are to be integrated Maintenance of customer relationships during integration phase.

Factors facilitating Integration

Mission and vision Ensured communication Selecting the right leader Welcoming new culture Teambuilding

Capturing value from different sources

Identifying Sources of Value

Growth-oriented sources of value: New products, service offerings, markets, customer segments, and distribution channels Enhanced market presence and market capture Enhanced product development efficiency, i.e., leveraged R & D, internal best practices Combined technologies or capabilities Leveraged sales force Increased capture of the value chain

Identifying Sources of Value

Efficiency-oriented sources of value: Integrated supply chain Leverage procurement volume (product and non-product) Production footprint optimization Facility optimization Vertical integration, de-integration Distribution channel optimization Sales force optimization Headquarters consolidation Support function consolidation like human resources, finance, IT, etc.

Identifying Sources of Value

Other sources of value:

Financial value such as balance sheet items, taxes, etc. Optimized programs and policies e.g. benefits programs Rationalization and/or elimination of special programs, projects, etc. Additional alliances or relationships

Strategies for Post merger Integration

Provide visible leadership from top management Ensure that the transition follows a structured and phased approach Ensure that goals are clearly defined and progress is tracked Manage change from the outset Use best practices to drive the creation of the new organization and its business processes Use cross-functional teams to drive merger Ensure that communication is well planned and coordinated Recognize that a merger is fraught with risk - avoid taking too much for granted

Strategies for Post merger Integration

Focus on adding value to the enterprise, while avoiding those actions that can destroy it Avoid the compromises that result from playing to politics Concentrate on key employee retention Identify the leadership who will make the merger work Do not leave culture clashes left unchecked The "cultural migration" to the desired organizational behaviour is best achieved by visible example along with continuous reinforcement IT systems are frequently incompatible

Strategies for Post merger Integration

Recognize the importance of the company's customers and its own people Focus on the 80/20 rule Avoid over-analysis Excessive focus on perfection is generally ineffective Do not miss revenue enhancement opportunities that come through cross-selling and the development of new products and services for the expanded customer base.

Factors influencing Post Merger Growth Strategies

Effective human resource strategies Social and cultural integration Reliable environment for employees and customers Well informed stakeholders Manage expectations Change agent Effective schedule Detailed market research

Thank you!