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Chapter 3: Institutionalising M&A Capabilities: Need of the Hour

Topics Covered

  1. Implementation of M&A as a Business Strategy
  2. Competition and Valuation of Tech-Centric M&A Deals
  3. Brand Value and the GPS Paradigm
  4. HR and the GPS Paradigm

Notwithstanding the diversity of causes and circumstances from company to company, any M&A deal is essentially a business process governed by generally accepted principles of prudence and precision, as also industry best practices. At the same time, M&A is essentially a strategic decision calling for a comprehensive study of the industry and market environment, including the motives, motivations, challenges and opportunities for growth, and measurable value creation. Being proactive is critical to M&As as it would be unwise to react only in the event of compulsion. Instead, M&A-related study should be treated as an ongoing exercise to evaluate potential targets or acquirers, as the case may be. A detailed analysis of competitive edge and valuation multiples is a given to help identify one’s stature in the given sector, as also foresee the probable footprints on the M&A horizon – whether applicable to potential acquirers or likely targets.

In today’s competitive world, every enterprise – looking to thrive or trying to survive, big fish or greenhorn, conglomerate or family-owned, global or local-would do well to look back and learn from the towering M&A precedents that have left an indelible mark in global corporate history. The ease of banking finance, supportive capital markets, and abundant cash flows have together fueled M&A activity like never before in recent years. More importantly, the need and significance of M&A are itself bursting at the seams of infinite possibilities. Among other things, an unprecedented surge in the number of SMEs, MSMEs, and start-ups has triggered this evolution in the wake of:

  • Phenomenal business disruption, thanks to the fast-paced technological innovation
  • Continual product and process innovation in line with evolving market needs
  • Marked rise in the entrepreneurial mindset due to value-added education, competition, and globalization
  • COVID-19-induced job losses, rampant business slowdowns, and imminent shutdowns

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