Question

With reference to the academic literature, explain the risks associated with this choice of acquisition. Discuss the potential managerial challenges in terms of post-acquisition integration.

Answer 1

Answer: Risk associated with the choice of acquisition

1.Higher price paid for the company.

2.Overoptimism with synergies of the companies.

3. Incomplete or improper due diligence of the company

4.Hidden & Unexpected cost of the company.

5. Change in a regulatory environment.

Challenges in terms of post-acquisition integration

1. Adapting to cultural change.

2. Threat of unionism.

3. Threat of security due to possible labor unrest.

4. Change in a Business environment.

5. Integration of Employees to new management Policies.