Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions, and Alliances

Part II. The Precombination Phase

The precombination phase encompasses strategizing, scouting, assessing and selecting a partner, deal making, and preparing for the eventual combination. Obviously, the quality of work conducted in this phase has a substantial influence on the eventual results of a combination. Our experience highlights several problems which afflict the typical M&A effort in the precombination phase:

• Flawed connection between business strategy and M&A plan. To begin, some buyers are not sure what they want to or can do in their marketplace through organic growth and thus follow fashion in their industry when it comes to M&A. This happens all too often in industry consolidations where market leaders make aggressive moves and followers ...