Mergers and Acquisition Strategies During Down Times in Global Agribusiness

Renee Targos By Renee Targos|9 August 2024

After the hardships many companies endured in 2023/2024, there are several strategies to regain ground. M&A expert CS Liew, Managing Director for Pacific Agriscience, shared his best advice for companies thinking about expanding their reach by acquiring a company or selling their company.

Here are tips and considerations when thinking about acquiring or selling a company, taken from Liew’s presentation “Reasons for Mergers and Acquisitions” at the AgriBusiness Global℠ Trade Summit on 8 August. For the best fit and outcomes, you should consider these four points:

  1. In the case of a partial take-over, the buyer reserves the right to 100% ownership based on meeting mutually agreed upon goals.
  2. In the case of the seller projecting significant sales/profit growth during the ensuing two to three years, the seller is to accept earn-outs or staggered payments.
  3. There should be post-acquisition plans and diligent implementation for any best case scenario.
  4. Both parties should recognize that deal-closing is only the beginning of an M&A success story.

Here are five challenges that can make a deal go bad:

  1. Sellers have an unrealistic valuation expectation of their company.
  2. Sellers want the buyer to bring money, technology, and meet all their needs as well as buying the company.
  3. Generally, companies do not want to sell when the company is profitable. However, most companies will not get acquired unless they are profitable.
  4. Buyers want to start talking and build a relationship. Sellers want a deal right away. There needs to be a middle ground so trust can be built to move toward the end goal of selling the company.
  5. For many companies, there is a public image to overcome such as losing face if one sells their company or doesn’t get a high value for it.

Renee Targos, as Editor of AgriBusiness GlobalTM Direct magazine, leads in content development, event programming, and managing the ABG Board of Advisors and strategic growth of the magazine. Renee’s professional experience covers more than two decades of national and international digital and print content development, editing, and journalism. She received a bachelor’s degree from Southern Illinois University and continued her education with master’s level courses in business administration and behavioral analysis. Renee has served as a board member for several Arizona-based non-profits and government commissions. See all author stories here.

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