CHAPTER FOUR
M&A power
M&A power is an expression of the ability, capacity and will present in the merging or acquiring organisations to successfully complete the M&A transaction, integrate the enterprises and achieve the intended economic and strategic value. It has many components but is best represented by the capacity of the organisation to drive the necessary change and objective, the clarity of purpose and the speed of attainment with which the whole M&A project is pursued. Thus the three main elements are clarity, capacity and speed. Combined, these elements will allow a merger to be clearly directed with due haste. These do not deliver the full project. That is only achieved when the other two key factors of M&A success are also present, those being process and people.
CLARITY
There needs to be an underlying rationale behind every acquisition and merger. Management will have set themselves, and hopefully widely communicated, that rationale and the goals that underpin it. These may be growth, cost reduction, market share, geographic spread or defense for example. Either way, these need to be formed into a vision of the future. It needs to be given to someone to drive it through. Without that clarity, the organisation is heading off on a midnight adventure, without a map, to a place it does not know even exists, and they have their eyes closed! The vision is for the long term.
FIGURE 4.1 M&A power pyramid
Most people are aware of the idea of goal congruence: the importance ...
