The economic uncertainty of any market could be a spur to business reunification. Smaller ones can be taken over by companies with a well-developed structure – this is a trend visible all over the world.
Such a transaction may bring benefits to each of the entities participating in it if it is properly prepared. A company offering Transaction Advisory Services in Delhi can help in this. We suggest what to consider when choosing it.
Two ways to connect – what are they?
Mergers or acquisitions of companies are an everyday business reality. However, both the most spectacular and smaller transactions must be preceded by a thorough analysis. At this stage, the help of Transaction Advisory Firms in India is invaluable.
The merger of enterprises (companies) may consist in establishing a new company to which the entities participating in the merger transfer their assets. This type of merger is referred to by some as a fusion.
At the same time, because of this operation, the entities participating in the merger lose their legal existence – this means that they do not continue their activities in the current form.
The purpose of the “merger” may be, inter alia, gaining a stronger position on the market by a new company or increasing the quality of manufactured goods.
Another way of the merger is the acquisition of one company by another company. Then, all assets of one company (the so-called acquired company) are transferred to another company (the so-called acquiring company).
In other words, one company takes over the assets of the other. As a rule, it is the stronger entities on the market that absorb the smaller entities.
In this way, there may be a reduction in the number of entities competing in each market. The purpose of the operation may also be the expansion by the acquiring company to new areas.
Many factors contribute to the success of both the merger and the takeover. First, you need a good action plan and its efficient implementation.
3 factors to consider when choosing a consulting firm
Transaction consulting is the domain of consulting companies. How to choose a company that will be able to help in a planned merger or acquisition of a company? When choosing, the key factors should be:
- Experience of a consulting company – it is worth checking whether the company has previously implemented projects involving mergers of companies and has references in this area,
- Specialization of the consulting company – does the company have experience in consulting in the industry in which the companies covered by the transaction operate,
- interdisciplinarity and comprehensiveness of the offer – it is best for the consulting company to have the resources to carry out the entire process, including due diligence, preparation of documentation, and securing transactions from the legal and tax side.
Advisory companies that offer transaction advisory services support not only the acquiring companies but also the acquired companies. This means that their offer can also be used by representatives of a company that is being prepared for takeover or sale.