Merger and acquisition processes are very fundamental to business growth, as they make companies increase their market share while acquiring new products or markets. To ensure success in an acquisition process, it would be important to know the major steps involved in the MA process.
1. Formulation of Strategy
Before investing in an acquisition, proper objectives must be defined. Companies need to understand why they are acquiring something - whether to grow their share of the market, acquire new technology, and enter new regions. It will help with strategic alignment with long-term goals of the company.
2. Identification and Rating of Targets:
Once you have defined the overall strategy, you then look for possible acquisition targets. It is necessary to evaluate in detail whether the target company meets your strategy, financial objectives, and your corporate culture. The need will be due diligence on the company's financial standing, market position, and legal standing.
3. Due Diligence:
Probably, this is the most important part of the merger and acquisition in Malaysia process. This stage includes a substantive investigation of the financial statements of the target company, contracts, intellectual property, and liabilities in addition. Such will help in indentifying any risks and revealing information that may prove crucial to determine the final decision.
4. Negotiation and Deal Structuring:
After due diligence is concluded successfully, negotiations start. The two parties come to a consensus on the price, structure, and terms of the deal. In this phase, payment structure, liabilities, and transition in management are established.
5. Planning and Execution for Integration:
In most acquisitions, integration post-acquisition is the most challenging step of all. Successful well-planned integration helps ensure teams, operations, and cultures integrate easily, leading to long-term success.
Using these fundamental steps, these steps will enable companies to have the majority of their confidence while executing the process of MA and gaining benefits out of the acquisition.
