Announcing the M&A Deal to the Public

As many versed in buying and selling businesses know, timing is everything in mergers and acquisitions. The specific timing for informing employees of a sale has become a controversial subject between business sellers. Oftentimes, a business owner will delay revealing the news of a sale until after the M&A deal has already been closed. While no optimal manner of delivery has been perfected, experts can agree on the preferred timing of announcing the news to the general public.

The basic rule includes only leaking the news of an M&A deal after the process has ended and the deal is closed. Premature media coverage could harm the company and perhaps kill the deal, or at least lower the purchase price due to bad press.

No matter what time a seller chooses to inform employees of the M&A deal, it is paramount that employees be notified first. If staff discover through a media outlet that their place of employment is changing hands (and possibly making job cuts), it will create an atmosphere of distrust and build negative feelings toward the company. Therefore, it is best to make the announcement in person if possible and focus on the upcoming constructive changes.

Once employees are in the know, it is ideal to spread the word of the sale to others as quickly as possible, so that the news can come directly from the seller. If key associates discover the news of a large scale M&A deal that has the ability to affect their livelihood, then it may harm the company’s growth or lower the brand’s reputation if the news leaks to the wrong people. Be the first to inform everyone of the good news. Keep in mind that word can spread quickly, so moving in a strategic manner will improve chances of a successful receipt.

After employees, the next group of people vested in the business receiving news of the sale should include any suppliers or partners. If possible, the seller should make these announcements in person, depending on the level of relationship that the business retains with the associate. While an email can come off cold, it is sometimes a necessity when trying to reach a larger audience.

Customers should also be informed after the employees are “in the know”. This can be done through reaching out via mailing lists. It is important to release this information to clients before competitors are able to lure them away with the news. In the release, be sure to assure customers of the positive changes to come in the future with the establishment of the new owner. Give them a reason to be happy about the M&A deal.

Once those invested in the company are aware of, and committed, to the new deal, it is time to announce the news to the media. This may be accomplished by writing a press release that includes details such as who should be contacted for further information and when the news may be released. Be sure to include some information about the new buyer and how they will positively influence the direction of the company.

If you would like some assistance for any stage of the process of selling a business, the professionals at George & Compay are here to help you. Contact us in complete confidence.

Have you ever had experience, good or bad, with the timing of a business sale or merger? We and our readers would love to hear your input.