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Factors to Consider Before a Merger

A merger is a very common thing that occurs in the lifetime of a company; as it is a process of expanding ones enterprise. In this process of expansion two companies come together and both take some remnants of each enterprise and create a third commercial entity. In other words, when two existing companies unite together to form a new company, it is known as a merger.

Now, there are various reasons why a company decides to merge with another one and various kinds of the process. There are so to say principally five types of mergers: Conglomerate, Horizontal, Vertical, Market Extension, and Product Extension. In the first type there is nothing in common between the merged companies, in the second one both companies belong to the same industry, in the third the two companies make parts of one single finished good, the fourth one is where both companies make the same product but in separate market and finally the fifth one is where both put in products that go well together.

Before carrying out any kind of financial proceeding it becomes absolutely necessary to consult a professional in the field. For a simple fact that it involves your finances and you need to be extra careful with that. Always look out for someone who has several years of experience in the financial world like Dessa Bokides

She has over two decades of experience in finances of large corporations and leading investment banks. Her most recent position was that of an Executive Vice President and Financial Officer at ProLogis. Here she was in charge of all the financial transactions of the company including the accounts, credit risks, corporate strategy, etc.

Entering a merger is a major step in the life of any organization; therefore a very careful consideration needs to be taken prior to the process so that there are no loopholes in the process. Experts say that it is important to at least keep in mind these following things before carrying out the merging process.

1.      Strategy and Mission- whether or not your enterprise and the one you are considering to merge with is compatible or not is important to understand and analyze whether your missions and strategy are similar to the other one or not.
2.      Ability to address a key service – whether or not that company will be able to address a key service provision or a functional gap for your company or not needs consideration.
3.      Tangible Benefits – will your company be able to feel the benefits of the merger or not.
4.      Values – whether the core values of the new company and yours can come into a consensus and be protected even in the new entity.
5.      Cultural fit – whether the organizations have similar cultures of work
6.      Leadership in the future – the proposed leadership in the future should be free of conflicts
7.      Critical success factors - the things such as trust, openness, positivity, support, commitment and mutual benefit can be maintained or not.

Any financial expert like Dessa Bokides will conform to the above mentioned considerations and encourage the owner of the business entity to consider these few things prior to attempting a merger.

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