Making Sense of Mergers
Making Sense of Mergers: Accountants as the Guiding Force in Corporate Consolidations
Mergers sound big. And they are.
Two companies come together to try and become one stronger business.
But here’s what most people don’t see—behind every single deal, accountants are doing the heavy lifting.
They’re the ones making sure it all adds up in the end, and the merger is worthwhile.
The Merger Explained
As mentioned above, a merger is when two companies combine into one unit.
Sometimes they’re equal partners and other times, one purchases the assets of the other.
Either way, a merger changes everything—money, people, systems, and almost always, the rules.
Why Mergers Happen
Here are a few common reasons:
- To grow faster
- To cut costs
- To gain new markets
- To remove a competitor
But no matter the reason, someone must check to see if it’s a good move, and that’s where the accountants come in.
What Accountants Really Do in a Merger
The Financial Advisors don’t just “look at the numbers.
They guide the entire process from start to finish.
Here’s how:
- They Check the Health of Each Business
Before the deal starts, the accountants dig in.
They check to see:
- How much money each company makes
- What they owe
- What they own
- If the numbers are honest
This is the due diligence step. It’s like a financial background check, but it’s intense and designed to reveal the true picture.
- They Make Sure the Deal Is Fair
Once the numbers are analyzed, they help set the price.
And that’s not just “what feels right” or the amount someone wants to retire comfortably on a tropical island.
It’s based on the real value and that number is based on facts.
They look at profits, debts, assets, and any component that has relevance to the deal.
They also help figure out how to pay for the deal with cash proceeds, stock, or a mix that works.
- They Plan the New Setup
After the deal, everything must work together.
This includes:
- New accounting systems
- Shared budgets
- Updated payroll
- Tax reporting
Successful accountants can help merge these without overlooking the critical issues.
- They Spot Risks Early
Mergers aren’t always smooth.
Accountants look for hidden problems—like lawsuits (or potential liability), tax issues, or bad records.
They raise the red flag early, so it doesn’t become a crisis later.
Accountants = Calm in the Chaos
During a merger, things move fast, and emotions run high. Futures are on the line.
Solid facts are paramount, and accountants bring clarity.
They use the facts to guide choices.
They help both sides stay focused and fair and keep the process based on information uncovered.
In short, they keep the whole thing from falling apart. And in mergers, that is too often a real possibility.
Final Thought
A good accountant doesn’t just crunch numbers and file tax returns.
They ask smart questions, and they find the truth about businesses and business prospects.
And in a merger, that’s what matters most.
If your business is thinking about a merger—or already deep in one—make sure you’ve got an accounting group that knows what they’re doing.
They might just be the most important people in the room.