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Surviving the complications of acquisition

Negotiating an acquisition can create headaches.

In an acquisition, complications arising from the deal can sometimes counteract the benefits of the sale.

By mid-June, Zynga, the social gaming business responsible for popular internet games such as Farmville, had acquired 10 companies.

According to the executive of one of the acquired businesses, speaking anonymously with Business Insider, the process of merging with Zynga felt "a little like you're divorced," since the transition meant the end of the seller's own company and the beginning of a partnership with a new one.

Working with the bigger company also meant getting used to the culture of moving "at Zynga speed," the executive said, as well as quickly discarding something that doesn't work and applying those resources elsewhere.

On the buyer side, there can also be unexpected downsides that can come back to haunt the acquirer after a deal is closed, writes investor Martijn J. Hoogeveen on his blog Open Business Revolution. Conducting a due diligence - though its success depends on cooperation from the owner, care taker and former employees - can give a buyer some foresight into upcoming claims from unhappy clients and staff members, as well as suppliers' intellectual property claims and complications that may arise from ongoing projects.

Acquirers can also mitigate these risks by excluding supplier contracts and existing client contracts from the deal, and drafting an extensive arrangement about take-over proceedings.

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