Below, I list the seven main misconceptions along with some comments based on my in-house M&A and M&A advisory experience and research conducted by Aalto University and Deloitte.
1. I am so experienced that I already know all there is to know about M&A.
In this era of cognitive and digital technologies, managing "business as usual" is already challenging enough. Succeeding in M&A is even harder. After all M&A often involves new or unknown companies, technologies, customers, and competitors. It is even more difficult to anticipate changes in these than in the business you know.
2. I don't need to know about M&A – it's just for the CEO and a handful of corporate development guys.
At the beginning, the number of people involved in an M&A project is often small. However, as the negotiations progress, more and more people at many levels need to be involved in analyzing the target company and preparing for integrating the target.
3. Only M&A strategy and price matter.
Choosing a target and negotiating the price is important. However, understanding what you get with the deal price and associated risks is equally important. And even the best deals can be ruined through poorly planned or executed integration. Inversely, the premium paid for a company is often based on synergies that can only be realized through excellent integration.
4. OK, but why should I care? Acquisitions happen so rarely.
True, for most companies acquisitions are infrequent. However, for every deal that materializes, there are tens of others that were investigated and prepared for just as intensely. Even though no-go decisions are not as publicized or celebrated as go decisions, no-go decisions often take just as much work, and sometimes are the hardest, yet most important decisions.
5. Fine, but I can just wait until I am asked to lead/join an M&A project before I learn more about it.
You will need to learn a lot and very fast when you are asked to do an M&A project. M&A projects are often very intense and may come on top of your day-to-day responsibilities. You may wish you had prepared for it when you had the time and mental energy to learn.
6. But I am smart, so I'll do just fine.
M&A decisions are often the most significant decisions companies make. They can make or break a company, not to mention individual careers.
7. Yeah, but I already know finance.
M&A is so much more than just finance, it's a lot about people, for instance.
Jonni Junkkari is Aalto EE's Program Director at Mergers and Acquisitions program. It gives you a structured understanding of the M&A process and equips you with the tools and skills you need for succeeding in each phase of the process. Read more about the program.