Mergers and acquisitions (M&A) are the primary method that modern companies use to expand their market. By joining forces with competitors, a firm can expand their market share and reach quickly.
Expert Interview: Skills You Need in Mergers and Acquisitions – Rene Blum, Swiss CFO
Negotiating M&As requires a steady hand on the tiller and some innate skills to make them go smoothly and last. Often, last week’s merger is this week’s casualty. The right leader ensure any merger or acquisition makes both entities stronger and doesn’t worry only about the optics or share prices.
Rene Blum is an international leader in Financial and Operational Management and a global expert in Business Transformations. From the UK, Russia to Europe, a leading finance manager, Rene led M&As that were valued in dozens of millions of dollars. He is a speaker and blogger who shares his understanding of these complex relationships, in Europe and Russia.
Rene sat down for an interview to discuss the skills needed to succeed in mergers and acquisitions.
Interview with Rene Blum, International CFO and Transformational Leader
Interviewer: Thanks for sharing with us today. What experiences have you had in mergers and acquisitions?
Rene Blum: Thanks for having me. My experiences with M&As span over 20 years and dozens of international borders. For example, one of the largest M&As that I did was for a Russian cement manufacturing company. We ended doing multiple acquisitions and mergers and formed one of the region’s largest cement manufacturing companies. Most importantly, we built a company that has been generating solid profits for nearly a decade.
I: What do you see as the most fundamental skill for success in M&As?
RB: People skills. It seems like an odd first choice, because we always think of these as financial transactions and they are. Nonetheless, businesses are made up of people. The people in the boardroom, the ones in the field, and the ones that have invested money. To succeed in merging large groups of people, you need to be able to speak to them clearly and in their own language.
I: You mean that you need to be able to speak several languages?
RB: (laughing) That helps. I do speak several, but no, not their tongue, but in the terms they can understand. If you are working with a group that is primarily older, you will need to speak of different concerns that if they are young. Engineers speak and think differently from management. Knowing how each group speaks can help you to relate to them and show them the positive reasons for a merger or acquisition.
I: What are the other skills that you believe that a CFO needs to lead mergers well?
RB: Another vital skill is to be detail-oriented. That might seem obvious and most CFOs are very good that way, but it’s doubly important in an acquisition. What might be a small issue for a single company can be a massive problem for a merged company.
Things like pitch books and financial reports need to be flawless. That requires more than just the receiving CFO’s skills, but also the CFO of the company being acquired. Often, others will see them as rivals, but during the merger, these two people and their teams have to work as partners. Usually, the structure of the final financial department figures itself out. If not, it’s an opportunity to apply wise people skills.
I: And what would you say is the biggest challenge for someone executing a merger or acquisition?
RB: That’s easy: staying calm. It can be hectic. There are often boards of directors, CEOs, and many others that are putting pressure on to get the project completed. Finding a way to stay relaxed and not let the pressure get to you can make all the difference in whether this is a pleasant experience or a horrifying nightmare.