mergersWhen you work with start-ups and innovators, it’s typically a matter of time until a larger company decides to acquire them or they buy a smaller technology concern to grow. There’s a right way and wrong way to handle the announcement of mergers or acquisitions.

By: Dan Chmielewski, Director at Madison Alexander

In many ways, the communications to the internal audiences is more important than the external news. Mergers or acquisitions are always a reminder that audiences other than the media are often more important. Below, there’s a checklist of questions that must be addressed when announcing mergers or acquistitions even if the answers are not readily available, along with recommendations for the procedures involved in the announcement. Disclosure is always tricky in announcing mergers or acquisitions. Companies need to retain their best talent. It’s important to communicate to employees, partners, or suppliers disclosed early about the consequences of violating disclosures. Managing the grapevine is never easy. Proactivity is always the way to go and keeping disclosures to those who need to know is critical. Upon disclosing either party’s PR firm, it’s important to find out if client conflict exists. Ultimately, the acquiring party makes the decision on who is handling what.

External Questions

  1. What company are you acquiring?
  2. Why are you buying them?
  3. How is the deal being financed and how much is the deal through?
  4. When will the acquisition hit the company’s books (which quarter) and how will you report earnings going forward (for public companies only)?
  5. Why is this a good acquisition?
  6. Why is this good for the acquired company?
  7. What is your expectation of the potential revenue you will generate from the new acquisition?
  8. When will this deal close?
  9. Who will manage the new acquisition?
  10. How will this addition change your combined business moving forward?
  11. What is the business model moving forward? How will you integrate the two companies?
  12. Does this acquisition create new markets for you?
  13. Does this acquisition bring new products/technologies to the product set?
  14. Will any products be discontinued?
  15. Are you planning any job cuts to eliminate redundant positions/functions? How many? And where (where means both geographically and within company departments) will these cuts be made?
  16. What do you expect the new headcount to be?
  17. Will you be acquiring any other companies or products in the immediate future?
  18. Which companies will be the principal competition for the new combined company?

Every deal is unique. These questions are designed to get the communications process around mergers or acquisitions started. The questions can be added to or deleted if not relevant, and the recommended procedures are subject to change based on time and technology. Part II covers internal communications inside the organizations.

Part II covers internal mergers and acquisitions communication for organizations.

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