There is an element of predictability in the rules and practices that businesses will apply to merger and acquisition deals moving forward.
When one evaluates current trends, regulations and risks it is fairly easy to determine how the commercial landscape is changing and what the new rules will be.
- To start with, businesses will attribute more focus to the business they seek to merge with/acquire , with an emphasis on proper due diligence;
- There will be a trial implementation phase before the implementation of mergers and acquisitions to enable businesses to be sure of proper integration and synergy;
- Proper identification and analyzation of target companies is crucial to proper planning;
- Identification of the key terms of the deal to be negotiated and agreed;
- Greater emphasis on effective integration, especially in respect of systems, people, and culture;
- An increasing movement within the M&A sector towards cash generating businesses;
- Identifying the correct markets to expand into with the focus on increased profitability.
- Identifying and dedicating the correct skilled team to negotiate a transactions and the correct team to implement the transaction;
- As much as possible, funding of transaction will be executed byutilising cash reserves;
- An increase by businesses in cross boarder deals to diversify as it becomes progressively less burdensome from a legal and regulatory perspective to do these types of transactions;
- Greater focus on local knowledge in respect of cross boarder transactions than is currently utilised;
- M&A activity will be approached more cautiously in general.