5 Steps to Take When Facing Mergers and Acquisitions at Your Company

After the pandemic-induced market downturn in early 2020, the volume of M&A transactions rose again last May and, according to Nasdaq, rose by almost 20 percent a month between August and November. In addition, favorable interest rates and the increased availability of capital could further fuel M&A activity in 2021 and make it more likely that companies of all sizes will attract potential buyers.

A multitude of acquisitions may be good news for investors, but what about you? It is natural for employees to feel insecure and worried when their employer is taken on, especially given the current economic climate. Here are the actions you should take (and some mistakes to avoid) after learning that your business is being acquired.

Discover the acquirer’s motives and strategies

Your first concern is whether your role and job will continue after the acquisition is complete. Unfortunately, even if you come right out and ask your boss or HR department directly, you are unlikely to get an honest or accurate answer.

“That’s because your boss may not know his fate either,” said Mitchell Lee Marks, president of JoiningForces.org and author of Joining Forces: One Plus One Equals Three in Mergers, Acquisitions, and Alliances. The uncertainty stems from the fact that many buyers don’t have a strategic plan, at least initially, he added.

Even though face-to-face meetings with employees have been eliminated or made virtual, you still need to network with people within the acquiring company. You also need to read the reports and comments from acquisition analysts and journalists to gauge the acquirer, understand its goals, and understand how the purchase may affect you.

For example, if the acquirer wants to grow by adding new products or services to their current offerings, or needs talent to expand their geographic presence, the acquisition can actually advance your career. Conversely, if the acquirer wants to gain a larger market share in a shrinking sector, this may be cause for concern.

Also, check out the acquiring company’s track record to date, advised Marks. For example, if the acquirer’s management team has had a history of failed acquisitions, formwork, or significant downsizing, your fate may be sealed unless you can demonstrate that you can add unique value to the new business.

Do a personal SWOT analysis

Once you’ve discovered the acquirer’s goals and the types of people who fit into their culture, it’s time to figure out where you stand. By doing a personal SWOT analysis, you can identify your strengths, weaknesses, and actions that you need to take to advance your career.

Look for the first signs of a successful integration

Management doesn’t have to have all of the answers before starting an acquisition. Ideally, however, they should start setting up transition teams and planning the integration process once the deal is announced. For example, pay attention to how new management deals with IT integration and compatibility, cultural cohesion, and identifying talent that is crucial to keep.

If management doesn’t involve people from both companies in making decisions and are committed to following a proven process and success factors, the business could be doomed (like so many).

Don’t sit back

“Build strength by actively participating in the transition process,” noted Sarah E. Brown, startup mentor, author of “Power to the Startup People,” and VP of Marketing at Intricately. Once you have equity, find out what will happen to your options and benefits after you acquire your business.

See the integration process as an opportunity to learn new things and identify attributes that make you a “keeper” such as: B. Institutional knowledge, project management, collaboration and change management skills. Voluntary participation in a transition team; Find ways to increase your professional visibility by giving presentations or scheduling virtual meetings with executives of the acquiring company. You may even see an opportunity to make a difference and create a new role for yourself.

“Listen to your gut when you meet with buyers,” said Marks. “Does it seem like they’re being honest with you?”

As Brown pointed out, employees at startups that have been taken over by larger companies have historically had to move or adapt to a different culture. However, due to the switch to remote work, there are additional opportunities to maintain your current life situation and your work environment after the acquisition. So why not try to negotiate a new role or promotion? After all, you have nothing to lose.

Prepare … but don’t panic

Even if the situation seems bleak, don’t make hasty decisions (unless, of course, you are given a dream job opportunity). Whether it’s an acquisition or a merger, the process will likely take months, so you’ll have time to find a new job while you see how things go.

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