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What is the operative word in "M&A deals" you might wonder -in this slow economy? Well it is "deal" given the "give-up and get out" mood of a whole bunch of selling businesses. The bright news is that there are a whole bunch of cash rich firms looking for deals in this slow economy and the volume of $275 B $ in August is the highest in 10 years,
Waiting for consumers to get jobs and get more confident about spending is what is happening at the consumer end of the market. Just see the slow auto sales in August.
Cash rich,long term players are taking the opportunity to consolidate at the M&A level. Lawyers have been cancelling vacations in August to put together the deal papers in a hurry. This is great news because as consumers start spending many organizations would be in a stronger position to service the customer … provided the M&A pieces are made to work together.
M&A is the ultimate form of B2B with the trouble that the merged company has one owner but whole bunches of duplication.I mean duplication in managers, in the supplier base,in the distribution channel and production facilities. Getting a great M&A deal is easy but getting the pieces to work together is a challenge that must be addressed very rapidly.
As consumer demand picks up – management attention must move to market development rather than trying to just sort out the M&A and the supply chain.