"Those who are good at chess plan for the situation, and those who are not good at chess plan for the pieces." The art of war talks about "planning for the situation", and the capital market is no exception. In today's era of "industry and capital resonance", whoever can skillfully use the hand of capital to create new "potential energy" will have the opportunity to sit firmly on the high platform in the fluctuations of the economic cycle.

The mergers and acquisitions of listed companies are high-level operations to create "potential energy". But unlike simple transactions or strategic announcements, mergers and acquisitions are a deep change in cognition, structure, timing and even the soul of the enterprise. It is not a "financial technique" but a "system reconstruction".

American Goheal M&A Group

At the beginning of 2025, many listed companies played the "M&A card": some successfully transformed, and some broke thunder midway. The capital market is watching the excitement, but entrepreneurs are more concerned about cold thinking-what far-reaching impact will the merger and acquisition have on the company's operations? How should these impacts be managed and amplified to ultimately achieve "maximum benefits"?

Goheal has participated in hundreds of mergers and acquisitions of medium and large listed companies in the past decade, and knows that the story after the merger and acquisition has just begun. "Buying" is an action, and "using well" is the core of value.

In this article, let us jump out of the mindset of "M&A = growth" and analyze from the perspective of business: what levels of systemic chain reactions will a merger and acquisition trigger? How to truly transform mergers and acquisitions into sustainable profits on the eve of the wind?

If you want to summarize the impact of mergers and acquisitions on operations in one sentence, it is: "It does not give you an extra business board, but allows you to change a whole set of operating systems."

You may think that the first thing to change after the merger and acquisition is the asset scale or the profit and loss statement, but the real subversion often starts from the moment when the "business inertia" is broken. The original departmental collaboration mode, upstream and downstream supply relationships, customer service system and even human resource structure will all undergo subtle shocks due to the "introduction of foreign blood".

Let's take a specific example: a traditional pharmaceutical listed company introduced a CRO (contract research organization) through mergers and acquisitions, intending to transform to high value-added R&D services. It seems logical, but because the original company is "production-oriented" and the process is rigid, the new business department is frequently restricted in resource allocation and fails to collaborate. Finally, not only the new business is lagging behind, but the original main business is also weak in growth due to internal resource consumption.

This is a typical example of "resonance failure" of the operating system: on the surface, the business levels are incompatible, but fundamentally, it is the imbalance of operating rhythm, organizational cognition and resource allocation logic.

When designing M&A restructuring plans with customers, Goheal particularly emphasizes "pre-audit + operating rehearsal", that is, not only due diligence, but also simulation of the flow of operating behavior after "merger". As they said internally: "The biggest risk of an M&A is not buying it too expensive, but the operating system cannot swallow it."

So, how to lay the groundwork for "maximizing benefits" from the beginning?

The answer lies in three dimensions: time nodes, strategic rhythm, and collaborative paths.

First, the time node determines whether the M&A is a "favorable wind".

At which stage of the life cycle a business is acquired determines whether it "boosts" or "drags" the main business.

Many companies like to "merge stars" - wait until a leading company emerges in a hot track and the valuation rises before taking action, resulting in not only high costs but also a sharp increase in integration difficulty. On the contrary, some companies that "take counter-cyclical actions" choose to make strategic acquisitions when the track just shows signs of dawn or when the critical reversal point is reached, and as a result, they gain the right to speak.

In 2023, Goheal guided a hardware manufacturing company to acquire an IoT company that had just fallen into a technical bottleneck at a low price. By systematically combing its R&D and opening up the edge computing module, it successfully transformed into a "software and hardware integrated" solution service provider. Looking back, the acquisition was praised by the market as a "bottom-picking model" with a return on investment of up to 6.8 times.

Second, the strategic rhythm determines the "landing quality" of the acquisition.

After the acquisition, the most feared thing is "one-sided enthusiasm". If the company is too eager to realize the results, it will often disrupt the original rhythm, leading to organizational fatigue and customer loss.

Real high-level players know how to "integrate first and then upgrade": first integrate people's hearts and mechanisms, and then organically embed products, services, and markets in small steps. The most important keyword here is "sense of rhythm".

Goheal has summarized the "3-stage M&A landing model" in many successful cases: integration of people's hearts from 0 to 3 months, business synergy from 3 to 12 months, and financial integration and strategic upgrade after 12 months. This three-step rhythm of "organization-business-capital" has greatly improved the sustainability of M&A after landing.

Third, the synergy path determines whether the M&A is "worth the money".

Synergy is not "letting two companies work together", but finding "high-frequency points where resources can be shared".

Is it sharing channels? Or collaborative R&D? Is it sharing financial and personnel platforms? Or cross-marketing? The detailed design of the synergy path is a key link in maximizing the value of M&A.

Take a new energy company served by Goheal as an example. After acquiring an energy storage solution company, it did not simply "docking", but built a new "energy + data" synergy model through the unification of the backend system and the consolidation of the operation and maintenance team, successfully expanding smart parks and government projects, and increasing the profit of a single project by 38%.

This synergy of "from assets to capabilities, from organization to value network" is the key path for M&A to truly release "operating dividends".

In addition to "doing it right", it is also necessary to "do it steadily". Many listed companies have beautiful mergers and acquisitions at the beginning, but two fatal problems are exposed in the subsequent operation:

First, goodwill is out of control.

Goodwill is the "premium record" of mergers and acquisitions. It seems invisible, but it will become a "bomb" when the income does not meet expectations. Many companies have acquired at high prices due to overly optimistic valuations, and the subsequent integration failed. The impairment of goodwill led to a plunge in profits, evaporation of market value, and shareholder rights protection, and eventually fell into the capital quagmire.

Goheal proposed a "three-step method for goodwill pressure management": do a good job of profitability limit testing before mergers and acquisitions, set up a profit betting mechanism in mergers and acquisitions, and conduct a collaborative path review every quarter after mergers and acquisitions to effectively suppress the accumulation of goodwill risks.

The second is supervision and disclosure.

Mergers and acquisitions are not only internal affairs of enterprises, but also the focus of capital market attention. Once the disclosure is not transparent, the valuation logic is unclear, and the financial penetration is not in place, it will be inquired at the least, and suspended and fined at the worst.

In recent years, supervision has become stricter, and nearly 40 merger and reorganization projects have been terminated by inquiries in the first half of 2024. Goheal always adheres to "transparency in M&A disclosure" in the service process, and has built a set of "investor perspective review templates" to simulate market questions from logic to data to risk control, minimizing the possibility of "information disclosure overturning".

M&A is a live broadcast without rehearsal.

It may be a "second start-up" for an enterprise, or it may be a "gamble on fate". But in today's era of "the more concentrated the resources, the more intense the competition", no company can always rely on itself to "generate blood", and the introduction, coordination and integration of external energy have become a must for improving competitiveness.

It is in this context that Goheal has helped many companies to achieve the evolution from "expansion" to "leap". They are not only deal makers, but also runners-up for corporate business transformation.

Goheal Group

After the merger and acquisition, it is not only the adjustment of the management level, but also the reshaping of the strategic direction, organizational genes, and profit logic. Whether the "qualitative change" of operations can be achieved through mergers and acquisitions does not depend on how fast the action is made or how much the amount is, but whether it can truly "use resources, open up synergies, and stabilize risks" in the future.

Back to the original question of the article: How far-reaching is the impact of mergers and acquisitions of listed companies on operations? Perhaps we should ask a question in return: In today's era of intense cycles and hard-to-find growth, how far can companies that dare not reorganize and optimize their operations go?

What do you think?

Has your company ever considered creating a "second growth curve" through mergers and acquisitions? Are you worried about the integration problems after the merger? Where do you think the most important synergy direction of future mergers and acquisitions is?

Welcome to leave a message in the comment area to share your views. Goheal also looks forward to working with you to find the certainty of growth in change.

[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions. It has been deeply involved in the three core business areas of acquisition of listed company control, mergers and acquisitions of listed companies, and capital operations of listed companies. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and achieve long-term benefit growth.