Why do companies merge? In many cases, companies merge to enhance each other’s strengths and to reduce the effect of each other’s weaknesses. In the process of making two entities one, they reduce overhead, create efficiencies, and maximize profits. Here are three tips for successful mergers:
Uniting similar office cultures. If you are considering merging with a competitor, it is crucial that you
and your competitor share similar business philosophies and similar office cultures. Even when the numbers
make sense and the owners like each other, combining company cultures that share different values is the most
proven recipe for a merger disaster. Do not take a chance on this. The risks are far too great. Don’t waste
your time evaluating the possibility of a merger until you know that a merging candidate has an office culture
compatible to yours.
Matching complementary strengths and weaknesses. When searching for a life partner, you try to find a person
that compliments who you are—the good, the bad, and maybe even the ugly. If a husband and wife were exactly the
same, what value would they bring to each other’s lives? When looking for a candidate to merge with, the same
is true. You identify your strengths and weaknesses as well as the strengths and weaknesses of your competitors
and try to find a match that produces advantages you wouldn’t otherwise have.
Enter into discussions carefully. Initiating and engaging into meaningful merger discussions is very
difficult for business owners to do alone. Understandably, owners have to be extremely careful about revealing
sensitive information, financial and otherwise, to competitors. Without confidentiality in place and without
control in the discussion process, it is very difficult for business owners to overcome natural distrust and
very complex issues associated with merging. A professional intermediary can help initiate meaningful discussions
while protecting confidentiality for both parties, explore all benefits available through a merger, and help each
party accomplish their respective short and long term strategic goals.
