{"id":14224,"date":"2023-12-25T03:50:13","date_gmt":"2023-12-25T03:50:13","guid":{"rendered":"https:\/\/www.articlespringer.com\/?p=14224"},"modified":"2023-12-25T03:50:13","modified_gmt":"2023-12-25T03:50:13","slug":"financial-feasibility-of-merger-and-acquisition-businesses-in-uae","status":"publish","type":"post","link":"https:\/\/www.articlespringer.com\/financial-feasibility-of-merger-and-acquisition-businesses-in-uae\/","title":{"rendered":"Merger or Acquisition Businesses in the UAE: Know All About Their Financial Feasibility"},"content":{"rendered":"

Should two companies join together? A feasibility study helps decide. What steps does this involve? First, look at all the costs of combining operations. Will bigger size and scale boost earnings? When might that income boost happen? Compare costs and future revenues to see if the deal is worthwhile. Also, factor in risks; it might not succeed. Doing a financial <\/span>feasibility study in the UAE gives companies the facts to determine if partnering up pays off.<\/span><\/p>\n

Analyze your merger’s financial feasibility in 12 simple steps<\/strong><\/h2>\n

Step 1: Calculate Synergy Benefits and Costs<\/b>\u00a0<\/span><\/h3>\n

Calculate Synergy Benefits and Costs Estimate the value boost from merging capabilities versus integration expenses to understand the dominant effects driving potential merger success.\u00a0<\/span><\/p>\n

Step 2: Prepare pro forma financial statements<\/b><\/h3>\n

Prepare pro forma financial statements. Project forward 3-5 years on how combined income statements, cash flow, etc. could look based on current individual company data to quantify merger impacts over time.<\/p>\n

Step 3: Model the best and worst-case scenarios.<\/b>\u00a0<\/span><\/h3>\n

Run merger models under optimistic and pessimistic assumptions to bound potential upside and downside risk factors. Stresstest how results fluctuate given different conditions.\u00a0<\/span><\/p>\n

Step 4: Analyse Human Resource Impacts<\/b><\/h3>\n

Study expected headcount changes, facility\/location consolidations, and personnel interactions required for a cohesive culture to minimise talent losses during transitions.\u00a0<\/span><\/p>\n

Step 5: Consider Legal and Regulatory Hurdles<\/b>\u00a0<\/span><\/h3>\n

Assess if any business agreements, import\/export policies, or data security protocols pose compliance barriers that could obstruct integration or require renegotiation before pursuing a deal.\u00a0<\/span><\/p>\n

Step 6: Review Geographic Footprints<\/b>\u00a0<\/span><\/h3>\n

Determine if physical assets and inventory spanning wider operational locations post-merger introduce a currency, tax, shipping, or inventory blindspot vulnerabilities that jeopardise financial tracking and forecasting accuracy.\u00a0<\/span><\/p>\n

Step 7: Verify technology compatibility<\/b>\u00a0<\/span><\/h3>\n

Vet that existing IT systems, equipment, software, and data standards can be consolidated cost-effectively, or if upgrades add complexity that slows realising digital synergies.<\/span><\/p>\n

Step 8: Conduct market research on new combined offerings.<\/b>\u00a0<\/span><\/h3>\n

Test pricing, feature preferences, and purchase intent for hybrid merged products and services to confirm the expanded catalogue indeed taps wider consumer demand vs. just cannibalising existing sales.\u00a0<\/span><\/p>\n

Step 9: Define Leadership Selection<\/b>\u00a0<\/span><\/h3>\n

Agree whether the leadership team will blend executives from both companies or skew towards one legacy firm to set the scope for power alignments and conflicts.<\/span><\/p>\n

Step 10: Review Historic M&A Sector Trends<\/b>\u00a0<\/span><\/h3>\n

Research specifics on recent comparable merger successes and lessons learned for unique operational or financial considerations based on industry-specific integration complexity.\u00a0<\/span><\/p>\n

Step 11: Set realistic timelines.<\/b>\u00a0<\/span><\/h3>\n

Overlay dependency task logic across evaluation, close, transition, and optimization phases to spot precedence constraints that dictate minimum elapsed time spans before achieving breakeven or business growth<\/a> milestones.\u00a0<\/span><\/p>\n

Step 12: Calculate ROI Ratios and Likelihood<\/b>\u00a0<\/span><\/h3>\n

Quantify the degree of certainty in project expense payback periods and return on invested capital metrics based on risk-adjusted sensitivity forecasts as the ultimate feasibility go-no-go gauge.\u00a0<\/span><\/p>\n

How Do You Assess the Financial Feasibility of a Merger or Acquisition of Businesses in the UAE?<\/b>\u00a0<\/span><\/h2>\n

Here is a guide on “How to Access the Financial Feasibility of a Merger or Acquisition for Businesses in the UAE” in a simple writing style:\u00a0<\/span><\/p>\n

Step 1: Calculate Integration Costs<\/b><\/h3>\n

Add up all expected one-time costs to combine the companies. This includes things like:\u00a0<\/span><\/p>\n