Mills Shirley LLP Mills Shirley LLP
View Our Practice Areas
Printer-friendly pagePrint

Why do some mergers and acquisitions fail?

When two business entities combine into one, there are bound to be "pain points." Whether the companies have been friends, rivals or complete unknowns, the process is full of risks that can end up derailing a perfectly good plan. In other words, just because it looks good on paper doesn't mean it'll work out.

That doesn't mean you should avoid all the careful planning ahead of time. In fact, doing so can help you dodge crucial mistakes as the plan takes effect. According to an article in The Wall Street Journal, it doesn't take more than one of these integration mistakes to delay the successful merger and damage the new company:

Not being well prepared and not taking the time to create an extremely detailed integration plan. Sometimes mergers and acquisitions are rushed due to fear of competition; if this happens, the lack of details can come back to haunt you.

Not paying employees right after the merger because it's not completely finalized. Put yourself in the shoes of an employee who's worked at a company for 10 years and suddenly learns everything has changed. Not getting paid on time sends him a strong signal that this new, merged company doesn't care about its employees.

Leaving key employees in limbo. Once word gets out about the merger, other companies will assume that duplicate roles will mean a reduction in staff. Headhunters will also start contacting employees, assuming they may want to make a move, given the uncertainty. A smart move would be to figure out a new organization chart as soon as possible and assure the talent you want to keep that they are an important part of the plan. (And will be well compensated to stick around.)

Getting so involved in the integration that other, important aspects of the business fall by the wayside-especially customers. While a merger may attract a lot of attention, which seems positive, spending too much time on the business of it detracts from your main goal: serving your customers, both old and new. They'll need extra assurances, just like employees, that they will continue to be important to you.

If you can avoid these mistakes, you'll be laying the groundwork for a successful merger. An attorney with experience in mergers and acquisitions can offer valuable and strategic help.

No Comments

Leave a comment
Comment Information
Established in the 1840s when Galveston was the largest city in the state, Mills Shirley LLP has always been an integral part of Texas history and the Gulf Coast community.
Super Lawyers Texas Top Rated Lawyers State Bar Of Texas | Created in 1939

Mills Shirley LLP

Galveston Office
2228 Mechanic Street
Suite 400
Galveston, TX 77550

Phone: 409-761-1498
Fax: 866-674-7808
Galveston Law Office Map

Houston Office
Three Riverway
Suite 670
Houston, TX 77056

Phone: 713-242-1880
Fax: 866-674-7808
Map & Directions

Review Us
Email Us For A Response

Contact Texas’ Oldest Law Firm Contact us to speak with an attorney about your legal needs.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy