How are strategic planning and organization contracts affected by a merger/acquisition?

Although not initially time-critical, combining the planning process of the former organizations and planning for the future of the combined organization is an important part of ensuring the success of the merger or acquisition. The challenges of continuing business and financial performance depends in great part on successful planning. Care should be taken to ensure that the planning process is based on the new organization and not a continuation of one of the former organizations, typically the larger or more powerful one. Even in situations where the organizations are managed as separate entities, there should be some degree of coordination on planning among each subsidiary, particularly in business and market lines.

Outsourcing and contracts. Initially, determine what contracts exist and whether or not they will be impacted by the merger or acquisition. Typically, outsourcing relationships are contractual and cannot be automatically stopped because of a change in the organization. However, an attorney should review each contract to determine what impact it has on the new organization.

In some instances, the former companies may have contracts with competing venders. Difficult decisions, such as buying out contracts, may have to be made to combine the organizations. There may be significant tax ramifications that must be determined and planned for.