A well-thought-out analysis for any merger that is in the pipeline could be vital to the success of an acquisition. Custom B2B market research is essential to provide reliable and impartial market information that can assist in identifying critical deficiencies in due diligence.

Mergers could transform the financial position of an organization, operational structure and strategic direction. They can also create opportunities for synergies, growth, and cost savings. However, companies pursuing M&A deals should be prepared to tackle numerous issues that can arise from mergers, including the risk of integration as well as clashing corporate cultures.

The most important step in getting ready for M&A is to perform an accretion/dilution assessment. This is a method of estimating pro forma net income in order to determine pro forma earnings per share. An increase in EPS can be considered positive, whereas the decrease in EPS is regarded as dilutive. Often, Wall Street will frown on any deal that is dilutive as it is seen as adding to the risk of the acquisition.

Another important consideration is assessing whether there exists evidence of coordinated effects in the market, or whether the proposed merger could cause coordinated interactions. Coordination may occur by coordinating pricing, allocating customers, or co-ordinating capacity. In general, in order for coordinated interactions to take place it is essential to know who is serving which customers and why. It may be hard to locate sufficient evidence of coordination in the market. However, an analysis of a potential merger could determine whether a deal will lead to coordinated interactions.

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