Things don’t always go according to plan in the business world, and that includes mergers and acquisitions. Simply put, there’s always a chance that your next merger will fall through. Maybe it’s because the culture of the company you’re trying to acquire is too different from your own, or maybe the costs and logistics would make the entire process too difficult. In any case, you need to accept that things won’t always work out, and you need to be ready when a merger ultimately doesn’t go through.
Proceed With Caution
The best thing that you can do when a merger falls through is to learn from it and make sure that your own business can survive. Mergers and acquisitions are complicated and expensive business deals, and some mid-sized companies get too aggressive when trying to acquire smaller businesses. They focus so much on growing through mergers that they can’t sustain themselves when some of those mergers inevitably fall through. That is the one thing you want to avoid.
Before you proceed with a merger, you need to determine that it really is the best course of action. You need to make sure that you have enough resources to cover the cost of the merger while still making a decent return on your investment. You need to make sure that the culture and values of the company you’re acquiring will be in line with your own. You need to make sure that your management team will be able to handle the integration of a new company. If the answer to any of these questions is “no,” you should reconsider your merger.
Learning From Your Mistakes
When you do have a merger fall through, the only thing you can really do is determine why it failed and learn from your mistakes. If you analyze what went wrong, you’ll know what not to do the next time you try to acquire another company. That next time should also be a little ways off as well. Mergers get expensive, even when they don’t go through, and your company probably won’t be in a very healthy place financially after such a major setback. Speak to your advisors, take stock of the resources that you have, and focus on your own company for a while. When you get the chance to acquire another company again, think hard about whether it is the right course of action.