Strategic M&A communication

M&As offer a sure way to accelerate corporate growth. Instead of laboriously entering new markets or launching new products, they gain market share by buying another company, thereby increasing sales and profits.

M&As can significantly increase portfolio diversification. They allow companies to tap into new industries and business areas, spread risk more broadly and offset fluctuations in one or other business area with the newly acquired business areas.

The anticipated synergy effects are one of the most important goals of M&As. This is because the merger of two companies makes it possible to rationalise resources – and thereby increase both profitability and efficiency.

Thanks to M&As, companies can enter new and, above all, global markets faster. This saves the time and resources that would be needed to build up a presence from scratch. This is especially attractive for new markets that are key to new growth.

Especially when acquiring start-ups or technology firms, companies can access innovative products and services that strengthen their digital competitiveness after the transaction. This is particularly important in industries where competition is marked by rapid technological change.

By acquiring an established brand or a well-known company with a loyal customer base, the brand strength of the acquiring company is improved and customer loyalty is increased. These are two points that lead to a competitive advantage in both the short and long term.

M&As are typically an extremely efficient way to raise capital and secure financing. This is because the capital and creditworthiness of the acquired company can be used to finance the growth of the acquiring company.

A successful M&A story usually boosts the share price and increases the company's value for shareholders and investors. This is important because a company must always strive to further enhance and maximise shareholder value.

With M&As, companies can gain significant competitive advantages, expand their market position, combine resources and expand their capabilities in general. This is important for strengthening their position in a globalised business environment.

Especially in economically difficult times, M&As are a good way to overcome crises. Because a merger with another company can, on the one hand, restore financial stability and, on the other hand, open up strategic opportunities to adapt to changing markets.

If the corporate cultures of the buyer and the target company are not a good match, cultural conflicts and employee dissatisfaction can complicate the integration.

M&As can entail significant financial risks if the transaction leads to high debts or if the hoped-for synergy effects cannot be realised.

M&As entail numerous legal risks. The most important of these include breaches of contract, liability issues and various regulatory challenges.

The integration of two companies often brings with it operational challenges. These include technical difficulties, logistical problems and interruptions to business operations.

Shareholders, employees, customers and suppliers may oppose the M&A transactions. Resistance that jeopardises the transaction or at least requires significant adjustments.

If an M&A transaction is unsuccessful or associated with negative headlines, it can damage the reputation of the companies involved. However, the biggest problems usually arise from an overreaction to such developments. Therefore, an experienced M&A agency can prevent a lot of damage through professional crisis communication.

Overreliance on M&A as a base-growth strategy can make a company vulnerable to market and industry risks. This is also because this approach leaves other strategies untapped.

If the expected synergies are not achieved or the purchase price is excessive, the transaction can, in the worst case, lead to value destruction.

M&A transactions require a lot of time and some resources for planning, due diligence, negotiations and integration. If a transaction fails, these resources may have been used in vain.

Political developments and regulatory changes can influence M&A transactions, create uncertainty and lead to the failure of the transaction.

Planning of the communication strategy has to start very early in the M&A process to allow sufficient time for preparation and to identify possible challenges.

The messages formulated have to be clear and understandable, highlighting the reasons for the transaction, the strategic objectives and the benefits, and be consistent both internally and externally.

The timing of the communications should be carefully planned to share the right information at the right time and avoid confusion and the resulting resistance.

The selection of the right communication channels, such as e-mails, internal meetings, press releases or social media, should be geared towards getting the messages across to the target groups.

An experienced communications team should be put together to support the transaction, with the skills and resources to implement the strategy.

The communications team needs to be able to respond to feedback and changes. This is why continuous monitoring and adaptation are critical to ensuring that the communication works.

A crisis communication strategy should always be developed in advance to be prepared to effectively manage any issues or challenges that may arise.