'Mergers and acquisitions - lucrative, but diligence necessary '

The Chartered Management Institute (CMI) - UK's Sri Lanka branch and KPMG recently conducted a seminar on business growth prospects through mergers, acquisitions and restructuring at the Cinnamon Lakeside in Colombo. President, CMI Sri Lanka Branch, Rohitha Mendis said professional managers should explore new avenues for business growth to remain competitive in changing markets and stressed the need to understand the challenges that such actions would entail. Mendis said that CMI is the only Chartered professional body in the UK dedicated to promoting the highest standards in management and leadership excellence.

He said that CMI is committed to help shape and support managers of tomorrow enabling them to deliver results, by sharing the latest insights and setting standards in management development through presentations and seminars.

The event was moderated by Managing Partner of KPMG in Sri Lanka, Reyaz Mihular. He said that mergers and acquisitions is an expeditious way of growing a business compared to organic growth. Growth via mergers and acquisitions (M and A) entail many challenges but nevertheless many firms have success stories with regard to this mode of growth of a business not only in foreign markets but in Sri Lanka as well.

He said that businesses should be ready to respond to market opportunities and sometimes these opportunities are only available for a short time.

Organic growth might not be able to meet such demands and an effective alternative is to consider mergers and acquisitions.

Managing Director of Anilana Hotels and Properties Limited, Asanga Seneviratne, discussed a series of critical success factors that could affect the outcomes when carrying out M and A deals. According to Seneviratne, the team involved in the deal is crucial and the sense to recognise good opportunities plays a key part of a success story. His presentation also described some of the key M and A deals done globally and in the Sri Lankan market which have resulted in a significant increase in market capitalisation and shareholder value.

Founder and Managing Director of Norfolk Foods (Private) Limited, Mohamed Ziauddin, spoke on how businesses could reach greater heights through mergers, acquisitions and joint ventures.