Importance of Ongoing Due Diligence in M&A PPT

This PPT slide, part of the 21-slide M&A - Fit for Growth PowerPoint presentation, emphasizes the critical importance of maintaining due diligence during mergers and acquisitions. It defines due diligence as an attitude characterized by curiosity and openness to new ideas, particularly in transformational acquisitions. This mindset should persist beyond the signing of the deal and continue throughout the integration process of the acquired company.

A case example illustrates this concept. It involves a global food manufacturer that opted to acquire smaller brands, typically focusing on high-volume products and large-scale operations. The key challenge presented was deciding whether to manufacture new food products at the acquirer's existing plants or to retain the production capabilities of the acquired company. The unique packaging of the acquired brands posed a significant issue, as it could not be easily replicated by the acquirer.

The decision made by the acquirer was to maintain production at the acquired company's facilities rather than consolidating operations. This choice was guided by a focus on differentiating capabilities, which highlights the importance of leveraging the unique strengths of the acquired entity.

The result of this decision was significant. By avoiding an operational model change, the acquirer prevented potential confusion among customers and safeguarded the overall value of the deal. This example underscores the necessity of a thorough and ongoing due diligence process, which can be pivotal in ensuring that the strategic goals of the acquisition are met without compromising the integrity of the acquired brand.

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