Things To Consider During Mergers and Acquisitions
24 October 2019
You have just completed a business merger or acquisition, congratulations! Now you are probably considering your next move and looking to ensure that your business can move forward in the most effective way possible.
Following the completion of a business merger or acquisition, there can be a tendency to jump in and make changes as soon as the paperwork confirming the transaction goes through. Whilst it can be an exciting time, it’s important that no rash decisions are made, especially in the first few weeks following the merger or acquisition. Beyond affecting your existing clients, making immediate changes within an organisation can have a profound effect on the existing workforce.
Following a merger or acquisition, existing employees can feel exceptionally vulnerable as they will be expecting changes to come into place almost immediately; these doubts can have a huge negative effect on worker morale and can lead to a dip in productivity in the first few months of operation, so be sure to keep the core of the existing workforce in place where possible to avoid any initial issues.
The most important aspect of any business is obviously their existing customer base – so it’s absolutely vital to ensure that you do everything within your power to guarantee that you cater to their every need. Losing a business’s existing client base can cause significant issues, especially when this happens shortly after a business merger or acquisition, so it’s vital that steps are taken to ensure that existing business is not lost.
How To Ensure Customers Aren’t Affected During Mergers and Acquisitions
We simply cannot state just how important it is to ensure that your existing customer base is not affected during a merger or acquisition. With that in mind here are some of our top tips on ensuring that existing customers are not affected in the process of, or after a merger and acquisition:
- Let Clients Know Your Business Has Been Merged with or Acquired by Another company Immediately – Inevitably, any existing customers will be uncomfortable with changes, especially when they are as profound as your business merging with another or changing hands. It’s important to be open and honest with your existing clientele, reassuring them that things won’t be changing immediately and that the business has merged or changed hands for positive reasons.
- Keep Existing Customers In Contact With Familiar Key Contacts – It’s absolutely essential that you try your best to keep your existing clients in touch with familiar contacts within the business. Where possible, try not to make wholesale changes to Account Managers to ensure that existing clients feel a sense of continuity following the merger or acquisition. It’s really important that customers feel there has been a seamless transition as this will dramatically reduce the chances of the customer looking elsewhere for their products or services.
- Prioritise Existing Customers Before Going After New Business – It’s definitely worth solidifying the relationships you have already built during and after the process of a merger or acquisition. Whilst it can be tempting to dive in trying to secure new business, this can do more harm than good in some cases. Ensuring you have a solid base of clients already tied into contracts with your business is a great way to guarantee your business continues to thrive whilst you search for new business in the near future.
- Communicate Any Changes As Soon As Possible – When two companies merge, you’ll find that the existing customers from each business will need to adapt in some way. From your customers needing to adapt to new systems that are put in place to changes in the way your products or services are delivered – existing customers are inevitably going to be affected in some way. It’s vital that any changes that may affect your customers are communicated as early as possible to minimise disruption to their service.
If you are in the process of considering merging with or acquiring another business, then please feel free to get in touch with our team of Commercial Solicitors in Lancashire and Commercial Solicitors in Manchester who will be more than happy to assist you further. You can get in touch with our team by calling 01254 297130 to discuss your requirements in greater depth; alternatively, you can use our online enquiry form to submit a query, and we will be in touch with you as soon as possible.