Risks Mitigation Strategies Under A Merger & Acquisition Transaction

Mergers and Acquisitions ("M&A") are one of the most preferred methods for inorganic growth of businesses. However, M&As can go wrong due to various reasons: overenthusiasm about unquantifiable strategic benefits of the deal resulting in over valuation of the acquired company; post deal integration issues in systems, processes, human resources leading to lack of synergies; mismatch between vision and operating strategies of the new and old managers; undisclosed/unexpected liabilities or claims causing a dent in the benefits of the M&A, etc.

A failed M&A can lead to adverse impact on established systems and work processes, damage the company's reputation, erode goodwill and diminish customer confidence, cause erosion of employee's moral and cause employees to leave. All failed M&As necessarily lead to destruction of shareholders' value.