Investors who are looking for high returns will divert to invest in consumer product businesses. Such investors follow a formula of creating profitable growth. Nowadays, the consumer product companies have started to adopt a fashionable trend. They have started to share dividends and repurchases. Some acquirers concentrate on a creative way of increasing the costs while others follow a different way to balance innovations.
Successful acquirers plan deliberately for merger integration. They will find out what has to be integrated and what should be kept as secret. They will determine on the basis where they can create value. Companies have to include four elements to develop the mergers and acquisitions capability.
A business development office at center with close association to board, CEO and strategy group:
The business development office makes sure an ongoing and strong connection between strategy and mergers and acquisition. It helps in linking the gathered deal making the experience of the company to its center capabilities. It handles maintaining associations with business units and working with mergers and acquisition service providers.
Shared responsibility for new business motion between the corporate and the business units:
The business unit can get help from the corporate to get ideas for deals. The tasks of the business unit will be to determine new merger and acquisition opportunities.
A promise to differentiate due diligence and deal thesis:
Most companies do not start due diligence until they get a memorandum from an asset bank. There are chances to develop a deal wish list depending on the general value creation thesis of the company and methodically assessing possible acquisitions earlier than they are shopped.
Integration where it issues:
The process of integration is different for scope deals and scale deals. The successful acquirers assess each integration and find out what they can do innovatively next time.
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