How do we know when we are up to this stage?

By this point, you should understand your rationale for pursuing a merger and be ready to begin preparation. You will know you are ready when you recognise the potential risks and benefits of merging and how they relate to your organisation. You have considered alternative ways of working with other organisations, and concluded that investigating merger opportunities is a high priority. Finally, you have developed a shortlist of merger candidates by assessing a large pool of organisations against your priorities. You are ready to take the next step.

The more comprehensively you prepare for a merger, the more likely you are to successfully negotiate and implement a merger agreement. To help you prepare and make an informed decision about whether you are ready, it is helpful to reflect on the identity of your organisation, your relative strengths and weaknesses and your strategic directions. If you skip this step, you run the risk of commencing a merger process for which your organisation is not prepared. Effective preparation is key to achieve: 

  • œGood partner selection – understand your own identity and strategy to assess whether there is good alignment with another organisation.
  • Clarity of outcomes – decide your non-negotiables in advance to facilitate a negotiated outcome which is consistent with core aspects of your reasons for being.
  • Clear internal communication – articulate your current position and where you would like to be post-merger to make it easier to describe the benefits of a merger for your organisation. 

This section is a step-by-step self-assessment which should be completed before commencing merger negotiations to prepare for the preferred outcomes described above. Be open and honest to ensure any underlying issues are surfaced before proceeding. This can be difficult as those completing the self-assessment often have a vested interest in the outcome, and as such, a small group should lead this work to ensure ownership is distributed.

During the negotiation stage you will need to:

  1. Re-visit your vision and mission
  2. Understand your culture
  3. Assess key internal and external relationships
  4. Understand your bottom line
  5. Audit your physical assets
  6. Understand relevant legal frameworks
  7. Identify potential ‘showstoppers’

Please feel free to leave questions or comments on this part of the merger toolkit.