With the change in a business scenario all over the world mergers and acquisition ate becoming common. Companies are taking this path so that they can explore the wider market and utilize skill of others. There are varied other reasons for mergers and acquisitions, but this article is not about that. This is about The CFO’s Role in Merger and Acquisitions and how they can be fruitful.
Actually, the CFO plays an important role in M&A and they are the people who can make or break a deal. The CFO can consider the M&A deal and then plan out so that it turns to be successful for meeting the objective, whatever it was, whether to scale up or explore new geographic regions.
The main job of a CFO in relation to mergers starts with strategizing the merger. They are the one who has to ensure that the deal is financially sound. A part from that they are also responsible for providing an insight to the Board about the qualitative aspect of the deal. They must be able to provide a renewed vision and identify the existence of any potential threats.
The CFO is most trusted by the stakeholders and hence it is the duty of the CFO to give his voice to them to make them understand the benefits of the mergers and acquisition.
In mergers, two identities will be merged into one and hence there must be reduced costs, increase in sales that will boost the profitability, there will be a new pool of talent and other benefits. Now, in order to harness all this, it is important to kick start things at the right time nada los ensure that the right executives are handed over the responsibility. The CFO needs to integrate all these things so that people have a roadmap in front of them for the next few months.
The CFO also has to redesign his finance team so that they are able to gain maximum from the deal. If required as everything in the business will be merged there must be new incentive plans, compensation plans so that employees do not feel that they may be at loss on this merger. Again all this should be done by maintaining the overall objective of the business.
The CFO has many responsibilities to handle after any mergers or acquisitions, and if they can do it as planned the deal will surely be a hit.
In a video by Maureen O’Connell, Scholastic CFO explains The CFO’s Role In Merger and Acquisitions