Mergers and Acquisitions Services in Singapore
A merger occurs when two separate entities combine forces to create a new, joint organization. Meanwhile, an acquisition refers to the takeover of one entity by another. Mergers and acquisitions (M&A) may be carried out to expand a company’s reach or gain market share in an attempt to create shareholder value.
Singapore, in the last few years, has observed an upward trend in M&A activity. This was particularly seen in the small and medium enterprises space where companies have an annual turnover below S$100 million or fewer than 200 employees. The business setup opportunities in Singapore are thus immense. The businesses have grown in an economy with relatively advanced levels of development, technology, education, and access to global markets.
Advantages of M&A in Singapore
Following are the advantages of M&A in Singapore:
1. Cost-Efficiency
The merger can result in improving the purchasing power of the company which will further help in negotiating the bulk orders and leading to cost-efficiency. The increase in the production volume causes the per unit production cost resulting in benefits from the economies of scale.
2. Competitive Edge
The combined talent and resources of the new company can help in gaining and maintaining a competitive edge in the market.
3. New Market Opportunities
The market reach is improved by the merger and acquisition due to the diversification or the combination of two businesses. This results in better sales opportunities.
4. Synergy
When two companies come together a synergy is created which is powerful enough to enhance business performance, financial gains, and overall shareholders value in long-term.
Disadvantages of M&A in Singapore
Just like advantages, M&A also comes with few disadvantages. They are:
1. Decrease in Jobs
A merger can result in job losses. An acquiring company may shut down the under-performing segments of the company.
2. Could Be Bad for Consumers
With the merger, competition can reduce the industry and the new company may have higher pricing power.
Our Services
The mergers and acquisitions (M&A) process has many steps and can often take anywhere from 6 months to several years to complete. What we do is help you expedite your process of M&A.
We help you in:
1. Developing an Acquisition Strategy
Developing a good acquisition strategy revolves around the acquirer having a clear idea of what they expect to gain from making the acquisition – what their business purpose is for acquiring the target company (e.g., expand product lines or gain access to new markets).
2. Setting the M&A Search Criteria
Determining the key criteria for identifying potential target companies (e.g., profit margins, geographic location, or customer base).
3. Search for Potential Acquisition Targets
The acquirer uses their identified search criteria to look for and then evaluate potential target companies.
4. Begin Acquisition Planning
The acquirer makes contact with one or more companies that meet its search criteria and appear to offer good value; the purpose of initial conversations is to get more information and to see how amenable to a merger or acquisition the target company is.
5. Perform Valuation Analysis
Assuming initial contact and conversations go well, the acquirer asks the target company to provide substantial information (current financials, etc.) that will enable the acquirer to further evaluate the target, both as a business on its own and as a suitable acquisition target.
If you are looking forward to availing the M&A services, we at Business Setup Worldwide are at your disposal. Our advisors in Singapore have decades of experience in this field and can provide you with this service is an effective and cost-efficient manner. Contact us today to for more information.