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Mergers and acquisitions are becoming a popular way of expanding businesses across geographical borders due to the influence of globalization. A proper due diligence should be administered on the target business before a merger or acquisition transaction is executed. Two ways of significantly adding the value of a business is by merging it with others or acquiring other businesses. These provide fast ways of expanding an already existing business where synergies may be developed and new technologies product lines acquired without engaging in research. In addition, new distribution channels may also be acquired. Mergers and acquisitions commonly abbreviated as M & A are usually and strategic undertakings that enrich the future outlook of a business. The influence of globalization portends that there are business opportunities out there therefore energizing the move by businesses towards merging or acquiring other existing businesses that may be close or in faraway locations. For an M& A to succeed due diligence should be carried out. This involves the examination of a prospective target that is intended for a merger or acquisition. This is done in order to scrutinize the finances and liabilities of a target business. One of the most important things to find out is the past performance of a target business. Financial scrutiny should also include other areas like the research activities that the company has been carrying out. Other areas to consider are the hidden risks and environmental exposures. Such may lead to unfavorable outcomes in the future. M& A due diligence enable all parties to the transaction to make informed decisions about the details of the transaction. A careful assessment of the customer base is required so as to establish whether the customers will still continue doing business with a new outlook. This is especially necessary for acquisitions as customers may feel delineated from the brand that they have been already used. It is also important to evaluate the existing supply chains as they are crucial to the continued operation of a business. Professionals that are engaged during the examination of a target business include accountants, attorneys, investment bankers, auditors, environmental experts and many others depending on the nature of the business. Before merging or acquiring another business it is very crucial to establish whether the information systems and technologies that your business is currently using are compatible with the target businesses. This is necessary for a seamless transition. This can be established during due diligence where the cost of synchronizing systems can be fixed and factored into the overall transaction. This will enhance the exchange of information between the new subsidiary or branches networks. This is crucial in today’s highly technology savvy business environment. The success of a merger or acquisition is heavily dependent on employees. In this connection all employees should be fully furnished with how the new business outfit will impact on their day to day activities. Remember that your business is acquiring new employees that were working for the target market who may be unsure about their positions. During M&A due diligence you should open and maintain communication lines between all those involved or impacted by the transaction. This is important during the post integration period to ensure a smooth transition. You should ensure that the professionals that you engage to examine a target have the necessary technical capability as well the foreign language skills and infrastructure required. This is because a merger or acquisition may involve businesses that are in different countries that do not share language and culture. The author of this article is expert in writing articles about market research and consulting. Author has also written many articles on SWOT Analysis, Market Insight, Market experts, Competitive Benchmarking, Industry Research Report etc.
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