A well-conceived merger analysis can be crucial to the success of a merger. Custom B2B research is essential to provide accurate, objective market insight that can help to identify the key weaknesses in due diligence.

Mergers could drastically alter a company’s financial position, operational structure and strategic direction. They also provide opportunities for growth, synergies, and cost savings. Companies who are looking to engage in M&A should be prepared to face the challenges that mergers can create like integration risk and clashing cultures.

The most crucial step in getting ready for M&A is performing an accretion/dilution study. This is a method of estimating pro-forma net income and then calculating pro-forma earnings per share (EPS). A rise in EPS can be considered positive, whereas a decrease is viewed as dilutive. A lot of times, Wall Street will frown on any deal that is dilutive, as it is seen as increasing the risk of the acquisition.

Another important factor to consider is whether there is evidence of coordinated effects in the market, or whether the proposed merger would cause coordinated interactions. Coordination can be achieved through coordinating pricing or allocating customers. In general, in order for coordinated interactions to occur, it is necessary to have clear information about who is serving which customers and why. It might be difficult to find sufficient evidence of coordination in the market at hand however, an analysis of any merger could help determine whether the deal is likely to create coordinated interactions.