Analysis For a Potential Merger

A well-thought out merger analysis could be vital to the success of a deal. Custom B2B research is crucial to provide accurate, objective market information that can help identify key gaps in due diligence.

Mergers can dramatically change a company’s operational structure, financial standing, and overall strategic direction. They can also provide opportunities to save money, grow, and synergies. Companies that are considering M&A must be prepared to meet the challenges that mergers may bring like integration risk and clashing cultures.

The most important aspect of planning for M&As is to perform an accretion/dilution study. This is a method for formulating pro forma net income for the purpose of calculating pro forma earnings per share. An increase in EPS can be considered conducting vdr analysis for a potential merger to be positive while a decrease is considered to be dilutive. Wall Street is often against any deal that dilutes because it increases the risk associated with the acquisition.

A second important consideration is to examine if there is any connected effects on the market or if the proposed merger will lead to coordinated interactions. Coordination may occur by coordinating pricing, allocating customers, or coordinating capacity. In general, in order for coordinated interactions to happen it is essential to know who is serving which customers and why. It may be difficult to find sufficient evidence of coordination in the market at hand but a study of potential mergers can help determine whether a deal is likely to create coordinated interactions.