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3 Tips for Achieving M&A Success in CEE

By Suzy Bibko, EMEA Content Marketing Manager, Merrill Corporation

M&A deals in Central and Eastern Europe (CEE) are on the rise, bucking the downward trend across Europe. According to Mergermarket (EMEA Trend Summary 1H19), 175 transactions closed in 1H19, worth €102.bn. And energy, mining & utilities was the highest-performing sector (€2.5bn), accounting for a 25% share of all deals. Going forward, they predict the telecoms, media and technology (TMT) sector will be a hotspot (based on potential companies for sale).

Source: EMEA Trend Summary 1H19, Mergermarket

Source: Deal Drivers EMEA HY 2019, Mergermarket and Merrill Corporation

Do Your Diligence
So, how can you continue to achieve M&A success in the CEE? According to experts at the MerrillCorp/Deloitte Vienna conference (Insights into the CEE M&A Market and Private Equity Market) earlier this year, as well as results from our Due Diligence 2022 report, it comes down to doing your diligence in all areas. Knowing your objective, building long-term value, and ensuring a good team and the right tools are in place can make a huge impact on your success.  

Source: Due Diligence 2022, Merrill Corporation

TOP TIPS FOR SUCCESS

1. Know Your Objective
It may sound basic, but knowing why you are pursuing this deal can be just as important as how you do it. Ask:

  • Are you doing this because you view the business solely as a cash cow?
  • Or because of peer pressure/everyone else is making acquisitions?
  • Or because it’s ego-driven?
  • Is this transaction really going to be as transformational and problem-free as expected?
  • Have you considered all the surrounding issues that this deal could bring, and will it still meet your objective?

2. Build Long-Term Value
Although corporates and PE may seem to have opposing growth objectives on a deal (long-term versus short-term), building long-term value is a common goal:

  • Corporates: achieving long-term growth is synonymous with achieving long-term value.
  • PE: building long-term value over the short term/holding period ensures a maximised exit.

3. Put the Proper People and Tools in Place
But to do this successfully, you need the right people and tools in place, as M&A is not just a mechanical process. People are key to a successful integration process, which often hinges on ensuring the right talent is in the right place. And technology can accelerate the due diligence process, and ensure better security and greater analytical capability.

  • Does your team speak all the languages involved?
  • Will targets be afraid of losing power or their jobs?
  • Are you communicating enough and correctly?
  • Are you following best process?
  • Is your technology enhancing the process?