Mergers, integrations and joint ventures among companies are probably the most complex processes in corporate finance.
They are comprehensive processes that affect all the company’s areas and where many problems arise. This process must start with a solid foundation and with the conviction that there is a need for this from both parties, which must obviously come from prior thought, where a strategic planclearly envisages this option as the best for the companies involved.
Based on the parties’ convictions, it is necessary to perform an in-depth analysis of all the company’s areas (design, engineering, production, marketing, human resources, finance, facilities, markets, etc.) with the aim of designing a new entity that makes the most of all its parts and tries to correct or avoid each part’s weaknesses.
In all the cases, we must subsequently assess each part’s contribution and, what is more complicated, each part must acknowledge and assess the other part’s contribution, which is an arduous task with long negotiations.
Based on all of this, we establish the swap equations or the stakes in the new company and the development plan for all the necessary actions with the aim of reaching the desired final picture.
In short, this is a very complex and long multidisciplinary process where the professionals’ involvement is fundamental for several reasons:
- The company owners and managers will neglect their current business management because they have to devote a lot of time to this type of process, which will have serious consequences for the business whether or not the transaction is completed successfully.
- A third party will provide some objectivity as well as professionalism to the plans.
- The experience of a professional multidisciplinary team involved in the project helps to resolve the difficulties arising during the process by providing prior case studies, creativity and solutions so that it can advance.