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How does direct communication established during M&A deals

It is often difficult to immediately assess the impact of the transaction on the business of companies. To do this, you need to understand their strategies, industry specifics, and detailed terms of the deal. It takes a lot of professionals for this and only a small part of the analyzed transactions is approved. At the same time, many of them do not pay off or do not lead to the goals that were originally set.

The Meaning of M&A Deals 

Every company wants to develop and generate more and more profits. To do this, you can go in two ways:

  • create a business yourself;
  • buy someone else’s company or merge with it, that is, compare best virtual data room and conduct an M&A deal.

M&A (Mergers & Acquisitions) – means mergers and acquisitions. There are two main types of transactions. That is, you can buy/sell a business or a part of it, or you can merge companies.

The trends in the conclusion of mergers and acquisitions (M&A) over the past few years show that this type of agreement does not lose its relevance. The previous year was the most productive in the last 20 years in terms of the number of M&A deals concluded worldwide. Thus, according to statistics, the number of such transactions in 2017 was 51,882 (for comparison: the previous record set in 2008 was 47,849 transactions). It can be predicted that by the end of 2018 new M&A records can be expected, since already as of the first half of the year this figure is approximately 45,000 transactions.

Thus, the direct influence of economic well-being in the world or a particular country on the popularity of such transactions is traced. In Ukraine, the main motivation for concluding M&A deals is, first of all, the need to attract foreign investors, since a small number of companies have a sufficient amount of their resources to conduct a successful business in the domestic market. However, despite the significant prevalence of M&A transactions, there is still a fairly large percentage of failed transactions. In this regard, it is worth considering the five main mistakes that the parties make, and how to avoid them.

Direct Communication During M&A Deals

The current stage of economic development shows that one of the key factors for the company’s success is building an effective corporate governance system. Moreover, in developed economies, corporate governance is viewed as a tool to reduce investment risks in a volatile environment, and, therefore, as a key factor in sustainable development. Thus, to maintain a global competitive advantage, increase the pace and scale of production, and improve the quality of products and services provided, new methods and tools of corporate management are required.

Companies should consider another circle of opportunities, involving interaction with other market players, and constantly look for such opportunities themselves, comparing the potential for internal growth and mergers. Mergers and acquisitions expand the horizons of modern companies. There are two main types of investment opportunities: 

  • internal (internal investments can be obtained through reorganization or investments in the company itself);
  • external (external investments are associated with the acquisition of new assets or with its inclusion in new projects).