Foreigners ACQUIRE or Merge
with a US Business
The Steps of Mergers & Acquisition
There are a few steps to take during a Merger & Acquisition (M&A)
1. Markets/Services- Making an Analysis for your Plan:
The mergers and acquisition process begins by recognizing growth opportunities in the business sector you are interested in. An analysis of collected data on the market you are wishing to acquire or merge with including but not limited to: the demographics, employers, competitor; business financials and consumer loyalty and opinions is required prior to making the decision. You must also:
– Check your own liquidity and financial health
– Define your goals and success objectives
2. Consider Merger and Acquisition Options:
At this stage you find the potential Merger or Acquisition options that fall within the strategic financial growth objectives identified in the market analysis. This involves identifying the possibilities through research or a consultant. We at DRSI can assist you in finding the right fit for you
3. Financial Forecasts:
An in depth evaluation of the financial forecasts and credit position of the newfound target must be made. The analysis must focus on volume, revenue, cost, and balance sheets. Evaluations on the likely benefits of a transaction with this acquisition or merger option, the risks and other opportunities must be made.
4. Making a Decision on an M&A Option: The benefits and issues of the acquisition or merger is to be considered in depth prior to making a possible life changing decision. While making a decision, a due diligence review must be done to understand the issues, opportunities, and risks associated with the transaction. This is done through a final review of the financial, legal, and operational aspects of the business and a full disclosure of all information relevant to the transaction. Additionally an assessment on the businesses value and the possible different structuring options for the merger or acquisition transactions to meet the objective you wish to achieve is required.
5. Negotiation and Agreements:
Prior to the offer being accepted, you must ensure a complete and comprehensive negotiation to reach an agreement. You must ensure that any regulatory approvals are obtained prior to the close of the transaction. During the transaction, you should monitor the acquisition or merger to ensure that the negotiations continue to meet the goals and objectives you have established initially.
6. Carefully plan and perform integration: Once you have merged or acquired a business and its operations, it is time to merge the 2 together. You must use the plan developed initially to ensure the cultures of the 2 businesses do not clash. In the beginning, it is like a trial, you analize what works and what needs to be changed to stay on target. The deal is not the most important part of the process , but rather your ability to transition the business and integrate the two to make it into one seamless, organization that is driven by success, cooperation and your ability to realize the value of the business.
Examples of successful Foreigner Mergers and Acquisitions of US companies
The world’s largest US pork producer, an American company called Smithfield Foods, was acquired by a Chinese corporation. Budweiser’s rebranding – the cans may say “America” on them, but this beer is now owned by a Belgian company. Hoover brand was sold to Hong Kong, China-based firm Techtronic Industries in 2000, bought by multinational consumer goods company Unilever for $326 million. America’s iconic ice cream brand Ben & Jerry’s was started by best friends Ben Cohen and Jerry Greenfield after they purchased an old gas station and turned it into a scoop shop in 1978. Burger King, the American famous hamburger and milkshake joint today belongs to a Canadian company “Restaurant Brands International”, a Canadian fast food company. German supermarket brand Aldi Nord bought Trader Joe’s which dates back to 1967. Lucky Strike, once America’s top-selling cigarette brand, was established in 1871 in Virginia fell into the hands of the Brits. US Motorola Mobility was sold by Google to Chinese computer corporation, Lenovo.
More than 7 million Americans work for foreign companies such as BMW, Airbus, Tata and Haier.