Relief Mergers – Series M&A Strategy 4

M&A that saves your business

There’s always ups and downs when you’re doing business and that is natural. But what if your downs that you’re encountering is a little too low or long? In the worst case, your company may end up going bankrupt. But like most problems out there, there’s a solution. It’s commonly called “Relief Mergers“.

In the last article, we’ve talked about the pros and cons of aggressive M&As. Most people sees cases of M&A from the buying side, as an aggressive growth strategy, but it can also be considered as a strategy to protect your business, when you see it from the selling side’s point of view.

An actual example case was back in 2008, company A was considering of selling themselves for business succession and company B agreed for acquisition. 2 months later, the two parties were in the final phase and things were looking good until the owner of company A decided to postpone the merger deal. Despite the persuasion of the involving parties, the owner didn’t change his mind. Then the Lehman Brothers hits the market.

The situation for company A suddenly turns bad. Once again they knock on the door of company B but since both company A and B were in the same market, company B was not in the situation to acquire A as well. Company A is on the verge of bankruptcy. Then company C comes to stage and offers to invest through allotment of new shares. As it turns out, the CFO of company A as negotiating with company C under the table, asking for help.

We as an M&A consulting firm quickly proceeded with the necessary procedures and succesfully kept company A from going bankrupt.

In this series, we’ll explain why M&A can not only save many SMEs but can also be a handy tool to strengthen your business quickly and efficiently.

To learn more about M&A for SMEs in Japan, don’t forget to checkout this book. (only available in Japanese)


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