Find out what is Merger and Acquisition? What are the forms of Merger and Acquisition? Why should M&A focus on Marketing?
In the 2016-2018 period, the Vietnamese market witnessed a series of popular Merger and Acquisition deals such as Kido acquiring 65% of Tuong An vegetable oil, Holcim Vietnam to SCCC, VIB acquiring CBA foreign bank, etc. and most recently, Grab acquired Uber in Southeast Asia. So what is Merger and Acquisition?
Learn What is Merger and Acquisition?
Merger and Acquisition? Mergers and Acquisitions, Merger and Acquisition is also abbreviated as M&A. M&A activity is an activity to gain control of an enterprise through the form of merger or acquisition of a part (number of shares) or the whole of another enterprise. The purpose of an M&A deal is not simply to own shares, but to participate in and decide on important issues that affect the business and governance of the merged enterprise. /repurchase.
Watching: What is Merger and acquisition?
Mergers (Mergers) is an association between businesses of the same size and gives birth to a new legal entity. All assets, common interests, rights or obligations of the merged or acquired enterprise will “return to” the merging enterprise.
Acquisitions are when a large business buys out smaller and weaker businesses, and the buying business retains its old legal status. The acquiring enterprise is entitled to legal ownership of the acquired enterprise.
What is the role of M&A strategy? It helps businesses expand market share, increase business efficiency, restructure the number of human resources more reasonably, cut unnecessary costs, take advantage of transferred technology, etc.
What is the Merger and Acquisition Process
? The M&A process has many steps and in practice can often take anywhere from 6 months to several years to complete. MarketingAI will outline a 10-step M&A process from start to finish as follows:
Step 1: Build an M&A strategy
First, before entering the M&A process, the manager who is the CEO or senior leader first needs to build and develop a clear M&A strategy about what they want to achieve from the acquisition and plans and methods to achieve that goal.
Step 2: Determine the search criteria for M&A
Identify key criteria for identifying potential target companies (e.g. profitability, geographic location or customer base)
Step 3: Evaluate potential targets
Managers use their defined search criteria to find and then evaluate potential target companies from the compiled list.
Step 4: Start planning your acquisition
The acquirer contacts one or more companies.meets his search criteria and appears to offer good value;.the purpose of the initial conversations is to obtain more information and to..see the level suitability of a target company merger or acquisition is
Step 5: Perform a valuation analysis
Assuming initial communications and conversations go well, the acquirer asks the target company to provide substantial information. (current financials, etc.) to enable the acquirer to further evaluate the objective objective, both in terms of business and appropriate acquisition target
Step 6: Negotiate
After producing several valuation models of the target company, the acquirer must have enough information to enable it to formulate a reasonable offer;.Once the initial proposal has been presented, two companies company can negotiate.more detailed terms
Step 7: Appraisal
The appraisal aims to confirm or adjust the value. of the target company by conducting detailed examination and analysis.every aspect of the target company’s operations – financial ratios,. assets and liabilities, customers, human resources, etc.
Step 8: Sales contract
When no major issues arise, the next step is to execute the final sale and purchase agreement; the parties will make the final decision on the type of purchase agreement, whether it is buying assets or buying shares. .
Step 9: Finance
When the deal is signed, investors typically receive a new stock in their portfolio – an expanded share of the acquiring company. Sometimes investors will receive new shares that identify a new corporate entity created by the M&A agreement. In a merger where one company buys another, the acquiring company will pay for the target company’s shares in cash, .stock, or both.
Step 10: Finish the transaction
At the close of the transaction, the target and acquirer’s management teams worked together on the merger of the two companies. Buyers and Sellers typically have some financial adjustments after closing and. Buyers must either integrate the acquired company into the parent company or ensure that they can continue to operate as a standalone business. create.
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1. Avoid a communication crisis
Not to mention the problem of communication when information about M&A activities is about to be announced to the outside, preparing for all changes. The The fluctuations of other partners such as distributors, suppliers, employees, etc. of the acquired business will increase when information about the company that is about to be M&A is gradually revealed.
For example, in the recent world-famous M&A deal between Uber Southeast Asia and Grab, many Uber drivers expressed disappointment when they were about to switch to Grab or would no longer have a job. Hundreds of drivers are at risk of losing their jobs if they have previously violated the terms of Grab. Many of these people who have borrowed hundreds of millions to buy cars and run taxis are now worried about bankruptcy because the burden is too great.
One of the factors that can support that is transparency of information in internal communication and external communication.
2. Adjust personnel and working process
In order to improve the efficiency and quality of a Vietnamese or international M&A deal, it is necessary to learn and exchange about company culture, distribution system, leadership capacity and goodwill to cooperate, etc. With the 7P marketing mix, this stage needs to focus on two factors, people and processes, because these are also two factors that often conflict between two businesses.
Internal marketing needs to be closely coordinated with human resources. During the implementation of the M&A deal, there should be coordination between the board of directors, the board of directors, investment and marketing specialists to ensure consistency in marketing activities and communication messages.
3. Unify brand strategy
Another problem is brand positioning after M&A. Due to the merger of two brands, it is likely that some brand strategies. will also be affected such as brand essence, brand identity system, and even brand structure. Brand architecture is also subject to change (brand architecture),… It is a process of finding out what makes a brand unique/different from its competitors and communicating it to the customer’s mind.
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Epilogue
The article outlines what Merger and Acquisition is and the role of marketing in a Merger and Acquisition deal. It can be seen that if the Merger and Acquisition deals don’t.
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