A well-conceived merger analysis can be vital to the success of a deal. Custom B2B market research is necessary to provide accurate and unbiased market information that can help identify critical gaps in due diligence.

Mergers can transform the structure of an organization’s operations, financial position, and overall strategic direction. They can also provide opportunities for growth, cost savings, and synergies. However, companies looking to make M&A deals should be prepared https://www.mergerandacquisitiondata.com/the-importance-of-conducting-vdr-analysis-for-a-potential-merger/ for numerous issues that can result from mergers, such as integration risk and conflicting corporate styles.

The most crucial part of preparing for M&A is performing an accretion/dilution study. This is a method of estimating net income pro-forma to ultimately arrive at pro-forma earnings per share (EPS). A rise in EPS is considered accretive while a decline is considered dilutive. Wall Street is often against any deal that dilutes since it increases the risk associated with the acquisition.

Another important consideration is assessing whether there exists evidence of coordinated market effects or whether the proposed merger will result in a coordinated interaction. Coordination is achieved by coordinating pricing or allocating customers. In general, in order for coordinated interactions to happen, it is necessary to have clear information about who serves which customers, and why. It can be difficult to locate sufficient evidence of coordination in the market. However, a review of a possible merger may help determine whether a deal will lead to coordinated interactions.