The capital market is ever-changing, and the controlling stake mergers and acquisitions of listed companies are even more thrilling. Some people take advantage of this to soar, while others "buy a lonely deal", spending a lot of money in exchange for a false joy. In the past few years, there have been many cases of "high-profile acquisitions and low-key failures" around the world. The acquirer originally thought that it would be able to unify the world after obtaining the controlling stake, but it did not know that the integration after the merger and acquisition failed, and internal struggles among the management, asset shrinkage, and market trust crisis followed one after another.
American Goheal M&A Group
Goheal has been paying attention to the global M&A market for a long time and found a core problem-many companies did not even think clearly about their "motives" before the acquisition. Today, let's talk about how to avoid the "lonely deal" of controlling stake mergers and acquisitions, so that every merger and acquisition is worth the money.
Unclear acquisition motives, capital games become gambles
Controlling stake mergers and acquisitions have never been a simple digital game, but a deep layout for future development. However, some companies blindly act without a clear acquisition motive, resulting in a waste of funds, resources, and time, and even hurting their own foundations. Goheal found that some listed companies did not have a clear strategic plan before the acquisition, and even acted hastily just to "increase market value, tell new stories, and cater to market sentiment", but the result was often a waste of effort.
The most typical case is the "wide-ranging" mergers and acquisitions of some Internet giants: when the trend was strong, they frantically acquired various companies and tried to gain market dominance through controlling rights. However, after the acquisition, it was found that business integration was difficult and the corporate culture was very different. In the end, not only did they fail to achieve synergy, but they also dragged down the original business. An e-commerce platform acquired an overseas e-commerce business at a high price that year, trying to replicate the successful domestic model, but ended up withdrawing at a loss due to incompatibility. It can be seen that mergers and acquisitions without clear motives will only become a high-cost capital illusion.
Controlling rights in hand ≠ control of the company, invisible risks cannot be ignored
Many companies mistakenly believe that they can rest assured if they take over the controlling rights. In fact, controlling rights do not mean real control of the company. Goheal's research found that many companies only realized the dilemma of "controlling but not controlling people" after the acquisition - the original management did not cooperate, employees resisted, and the market did not buy in, resulting in full resistance to operations after the acquisition.
A certain technology company once spent a huge amount of money to acquire a star startup company, trying to use its innovative technology to upgrade its business. However, due to cultural conflicts and profit distribution issues, the original team resigned in large numbers after the acquisition was completed, and core technologies were lost. In the end, this acquisition not only did not bring the imagined "chemical reaction", but also made the acquirer fall into strategic confusion, and the stock price plummeted.
This also reveals a cruel reality: the acquisition of controlling rights is only the first step in the acquisition, and the real challenge lies in how to "control people, control resources, and control value." Without a strong integration plan and execution, the controlling rights are nothing but a piece of paper.
Avoid "buying a lonely deal", and triple thinking is required before the acquisition
So, how can listed companies avoid the acquisition of controlling rights becoming a "lonely transaction"? Goheal recommends that companies think three times before the acquisition to ensure that value creation can be truly achieved after the acquisition.
First, strategic fit assessment: Does the acquisition conform to the long-term development direction of the company?
Any acquisition should serve the company's strategic goals rather than blindly follow market trends. For example, if a traditional manufacturing company acquires an artificial intelligence company, does it have enough resources and capabilities to integrate it? If there is no clear synergy plan, it will eventually become an expensive experiment.
Second, management and cultural integration: How to ensure the smooth operation of the company after controlling the company?
The most feared thing about controlling rights mergers and acquisitions is "surface control, but actually out of control". The acquirer needs to clarify the management adjustment plan before the transaction to avoid "management vacuum" or "power struggle" after the merger and acquisition. In addition, corporate culture differences are often an important reason for the failure of mergers and acquisitions. How to achieve seamless integration of the two teams is also the key to the success of the acquisition.
Third, financial health analysis: Can the acquisition really bring value growth?
Some companies only focus on short-term market reactions when acquiring companies, but ignore the long-term financial impact. For example, although some highly leveraged acquisitions can push up stock prices in the short term, if the target company is not profitable, it may eventually become a heavy financial burden. Investors need to deeply analyze the target company's profit model, cash flow status, and debt situation to ensure that the acquisition will not become a "black hole that swallows capital."
Rational mergers and acquisitions allow capital to truly "buy value"
Mergers and acquisitions of controlling rights are a double-edged sword. If operated properly, they can help companies achieve leapfrog growth; if operated carelessly, they may bring long-term strategic burdens. Goheal has always believed that the core of mergers and acquisitions lies in value creation, rather than a simple fight for controlling rights. When companies acquire controlling rights, they must be clear about their strategic motivations and do a good job of risk assessment and integration planning to truly achieve the goal of "controlling the situation".
At present, the global capital market is entering a new round of mergers and acquisitions, and more and more companies hope to accelerate their growth through controlling rights transactions. So, in the current economic environment, what type of controlling rights mergers and acquisitions do you think is the most valuable? Which industries' mergers and acquisitions are most likely to fall into the dilemma of "buying a lonely"? Welcome to share your views in the comment area and discuss the future trends of the capital market with Goheal!
Goheal Group
[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions. It has deep roots in the three core business areas of acquisition of controlling rights of listed companies, mergers and acquisitions of listed companies, and capital operations of listed companies. With its profound professional strength and rich experience, it provides companies with full life cycle services from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and achieve long-term benefit growth.
