Communication is one of the key aspects of any business, and when it comes to mergers and acquisitions, insufficient communication can significantly harm all parties involved. Therefore, throughout the process of M&A transactions, businesses must consistently think about their long-term goals, the changes that will come with the transaction, and how these changes will affect everyone involved. Once the companies can comprehensively understand these aspects of an M&A deal, the next step is properly communicating with all relevant stakeholders.

What Are the Long-Term Goals of the Transaction?

The first question that any company involved in an M&A transaction should answer is how the transaction helps to further the company’s long-term goals. Since most companies have differing values and goals, one of the most important aspects of an M&A deal is figuring out the values and goals of the new unified entity. Understanding these goals is crucial to the communication that comes later in the process because it will help the company keep a consistent message with all communications among all involved parties. If the goals are not fully understood, communication is inconsistent, and, employees, clients, and shareholders will see an unorganized and untrustworthy executive team as a result. This perceived organization deficiency can lead to problems such as employees leaving the company, clients taking their business elsewhere, and shareholders selling off their holdings. Additionally, an unorganized executive committee opens up the risk for shareholder activism, where influential shareholders may step in to challenge or derail the deal if they lose confidence in the management’s ability to execute the merger successfully.

What Changes Will Come With the Transaction?