mergers & aquisitions  
Successful Planning in M&A Transactions

M&A transactions are complex undertakings involving many parties (“stakeholders”) that need to co-operate in order to get the deal through within a given timeframe. Apart from the business and legal skills that are required to promote the project there a third set of skills is needed, which, however, is underestimated in many cases: the ability to efficiently steer the transaction and all people involved so that the transaction can actually be closed at the envisaged date. Transactions which lack of efficient planning need often to be postponed or do even fail - not because the stakeholders do not have sufficient business and legal skills, but because there is no plan in place which would ensure efficient co-operation and, as a result, achievement of the final goal on time.

What is Planning?

Like any other complex project any M&A transaction requires effective planning. Planning can be defined as “An act of formulating a program for a definitive course of action (Webster’s Online Directory 2006) and it can be described, using a less dictionary definition, as “the start of the process by which you turn empty dreams into achievements” (Mind Tools 1998). Effective planning in M&A transactions starts with the end date (which is the contemplated date of closing) and then continues with working backwards through the required process. People involved in the planning process (the “planners”) will, thus, first define by when the transaction must be closed and then go backwards to identify the entire process during closing and transaction start (and possibly also including certain post-closing processes). They will have to define, in particular:

  • The required resources (money and people)
  • The various objectives to be accomplished throughout the entire process
  • The activities required in order to reach the objectives and
  • The various milestones to be complied with in order to ensure timely accomplishment of the final goal.

How to involve all stakeholders?

Once these items are defined the planners must write down the plan and communicate it widely to all key stakeholders such as to the seller, the buyer, the seller’s advisors, the buyer’s advisors, the banks that may be involved for a required financing and all others who play an important role in the entire process. Effective planning will, however, not be an independent process carried out by a small number of planners alone. Instead, the planners will have to ensure to “get input from everyone who will be responsible to carry out part of the plan, along with representations from groups who will be effected by the plan” (McNamara 1997). If this is not done effectively the plan and the entire transaction will run the risk of being delayed or even fail. For instance: if third party advisors are entrusted with the overall planning they sometimes tend to underestimate the additional workload that the transaction creates for the key employees of the target company. Not only will they have to prepare the due diligence documentation, but they will also have to take part at management presentations, road shows, negotiations and will further have to ensure that any possible follow-up work is done quickly and diligently. If the planners do not pay enough attention to this issue and to the fact that the key employees continue to be responsible for all their daily work too, the workload of these employees may become unmanageable.

How to define Objetives?

Any effective planning must, thus, carefully consider what roles the stakeholders and their key employees are to play and what can reasonably be expected from them. Otherwise, the project may run into a deadlock situation and cause stress and mental pressure that could be avoided by appropriate planning. Such stressful situations can be avoided if the planners define and use SMART objectives. SMART is an acronym which is meant to describe that objectives must be:

  • Specific
  • Measurable
  • Acceptable
  • Realistic
  • And fit to a reasonable timeframe.

What does a good Plan Comprise?

A well developed project plan for M&A transactions will, thus, define SMART objectives for any stakeholder and their key employees. It will further comprise all resources needed and it will describe the activities and the various milestones or deadlines by when the objectives must be accomplished. Once the plan is drawn up the stakeholders will need to concentrate on the actions they are required to perform, and the planners will have, in addition, to think about control mechanisms that must be applied to monitor performance, such as

  • reporting
  • quality assurance
  • cost control
  • steering committee meetings
  • and specific measures that may become required to correct any deviations from the plan.


An appropriate project plan

  • will ensure that the required resources are available
  • define SMART objectives and allocate responsibilities to the stakeholders
  • specify appropriate milestones
  • write down the important elements of the plan and
  • put in place effective control procedures to identify difficulties and obstacles and to define corrective measures as early as possible.


McNamara, C., 1997? Basic Guidelines for Successful Planning Process. Free Management Library. [Online]. Available at:
[accessed 5 October 2007].

Mind Tools., 1998. Planning Skills. Helping you to think your way to an excellent life! [Internet] Available from:
[Accessed 15 October 2007].

Webster’s Online Dictionary, 2006. [Internet]  Available from:
[Accessed 15 October 2007].

(c) copyright 2007 Dr. Andras Gurovits, Niederer, Kraft & Frey

Dr. András Gurovits
Niederer Kraft & Frey

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