The primary job of a Texas company's CEO is to apply the correct values and visions to company strategies. Mergers and acquisitions are tactics rather than strategy, and the failure of executives to see that they must must fit the overall strategy leads to transactions that are unsuccessful. According to a study by KPMG, 83% of M&A deals failed to increase returns to shareholders. Entrepreneurs and company leaders can avoid the typical pitfalls by owning the values and the vision of a merger.
Owning the values means recognizing that company values are at the heart of any merger deal. Bringing two companies together requires that they share culture, or that their cultures can be successfully melded. At bottom, the path to cultural merger is about strategy. The first step is to target M&A deals that have the potential to enhance already-established strategic decisions. The second step is to target companies that match up with regard to company culture as well.
Owning the vision means recognizing what drives the company's overarching strategy. It can be only one of production, service, delivery or design. Decision makers should be careful to avoid being seduced by pitches that stress complementary strengths, scaling, new market access or new products. Each of these pitches in their own way may subtly mask what are potentially disastrous failures of fit. Complementary strengths, for example, can really mean the companies have wildly different strategies.
An attorney with experience handling these types of transactions might be able to help management weigh the proper factors in making decisions. Mergers are a complicated process, and extensive due diligence should be performed well before any contracts are signed.