Merits and Demerits of an Acquisition

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The merger and acquisition process with the purpose of expansion or growth of business is an extremely common practice in the corporate world. Companies strive to make themselves bigger and stronger in this world of competition by acquiring and combining with other entities of the same trade or at times different trade as well. However, sadly not all of the M&A deals are proven successful. The reason behind this probably is when emotions take over reasoning.

To make any deal of an M&A successful, it is important to evaluate a few things prior to undertaking it and also consulting a veteran and experienced person in the field.  The Chief Executive Officer of Spectrum Business Ventures Mr. Amit Raizada is an able leader of his privately held investment firm in all matters of M&A. His experience is what has taken his company to places like the Central Europe, America, United States, Canada, Mexico, etc.

The reviewing process pertaining to identifying the advantages and disadvantages of an acquisition process includes three levels of assessment – the strategic, financial and organizational-culture. Any acquisition obviously has one company weaker than the other, and when it has already been acquired by a stronger company, it brings along with it a new customer and product which proves to be of great value to the acquiring company.  It is this that makes cross selling opportunities available.

However, unfortunately, these cross selling opportunities may not always lead to fruition because customers may resist doing business with any new company, because most people are apprehensive of new products and companies. Hence, it is quite evident that the probable loss of a customer poses as a major disadvantage of the acquisition procedure.

Assessing the financial condition is important in order to be able to get an estimate of the kind of risk reward and inherent returns that can be got. If properly carried out an acquisition can bring the advantage of growth and financial prosperity to any company but a failure in the efficient management of it could saddle things up and bring the company to a condition of debt and an unworkable capital structure. A subpar growth or lower earnings in the future could be counted among the disadvantages of a mishandled acquisition.

Lastly it is important that the acquiring company is capable in handling the acquired company’s culture and organization post the acquisition. Success of the newly formed company largely depends on the competence of the acquiring company and able leadership. An inability to bring a new leadership and growth of the acquired company reflects an undermined process of acquisition.

Being such a risky undertaking it is absolutely important that professionals who have enough experience and are efficiently able to handle such, mergers and acquisitions need to be consulted. The Spectrum Business Ventures CEO Mr.Amit Raizada is one such veteran who has been contributing effortlessly to the progress of this company since the year 2002. It is by his efforts that the company is able to include assets and investments of varied industries.

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