Here’s why Venture’s latest M&A frenzy might be jeopardising the firm

The merger integration process can be disruptive.

The electronics firm has been binging on mergers and acquisitions (M&A) lately to spearhead growth, including agreements with Avago, Hewlett Packard and Honeywell. However, analysts suggest the bustling activity in terms of M&As might be counterproductive.

According to analysts from UOB Kay Hian, though the recent M&As involving Venture’s customers are less disruptive compared to past M&As, the merger integration process might bottleneck its production volume.

UOB Kay Hian added that the merger integration process might obstruct growth for up to nine months.

Meanwhile, UOB Kay Hian also expects a weaker 2016 for Venture in terms of networking and communications and printing and imaging.

“We expect revenue from networking & communications to increase by a slower 2.7% in 2016 (previously 9%) and 6.7% in 2017 (previously 8.2%). We expect revenue from printing & imaging to decline 13.2% in 2016 (previously -5.4%) and 9.1% in 2017 (previously flat),” UOB Kay Hian said.

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