As a Florida business person, have you often wondered what makes one business merger highly successful while the next one fails? In fact, Forbes indicates that it is not simply one failed merger for one successful merger that you may see. A whopping 83 percent of mergers are said to actually fail. Just what might make this be the case?
Among the many things that could factor into the success or lack thereof of a corporate merger or acquisition, it is actually company culture that may be the ultimate make or break element. Compatibility at this root level is believed to be one the essential elements to merger success. Proper evaluation of two companies’ culture before a merger takes place may then be one of the best ways to assess a proposed merger’s viability or chances of being successful.
When the cultures of two companies are very different, a merger may still be able to work but it will require a significant shift in the culture of one of those pre-merger companies. This is recommended over the development of an all-new culture for the mergered business. Decisions about what future culture is desired should help shape final choices about whether or not to merge or with what other company one might eventually merge.
At the end of the day, a merger should create value and that value should stem from foundational elements such as a company culture. If you would like to learn more about what is involved in a successful corporate merger or acquisition, please feel free to visit the business transaction page of our Florida corporate law website.