Many companies will do mergers and acquisitions, there are things to learn

1. The first pitfall is believing that a merger of equals can actually occur.The reality check is one group always benefits, if you believe in equality, there will be inequities along the way and self-destructive behavior.
2. The second pitfall is focusing so intently on strategic fit that you fail to access cultural fit, which is just as important to a merger’s success, if not more so. The cultural fit is this is the way we do things.
3. The third pitfall is entering into a reverse hostage situation, in which the acquirer ends making so many concessions during negotiations that the acquired ends up calling the shots afterwards.
4. The fourth pitfall is integrating too timidly, with good leadership, a merger should be complete within 90 days.
5. The fifth pitfall is the conqueror syndrome, in which the acquiring company marches in and installs its own management everywhere, undermining a reason of the merger – getting an influx of new talent to pick from.
6. The sixth pitfall is paying too much, paying a high premium which can never be recouped in the integration.
7. The seventh pitfall afflicts the acquired company’s people from top to bottom – resistance. In a new merger, new owners will always select people with buy in over resisters brains.

In terms of new products, put your best people in charge. They are good, hungry and passionate in their work and it will result in better results. To do this the President of the company has to talk about the venture and why x person has taken the job and the great expectations the company has for this venture.

Linking to dividend paying stocks, in a company’s cycle when it decides to move to a new level, it will be involved in new products and mergers and acquisitions. There are many good reasons to do them, however bear in mind the pitfalls and maybe you will decide to grow internally first.

There are more questions than answers, till the next time – to raising questions.