A well-planned merger acquisition integration process helps you realize a greater proportion of the deal’s value. This is a complex process that requires a mix of operational skills and finance, as well as changes management, and cultural understanding to be successful. Those that get it right deliver as much as 6 to 12 percent higher returns to shareholders overall than those who don’t.
The company that is buying must start thinking about integration as soon as possible in the due diligence and negotiations phases. A thorough assessment of the target culture will help you determine your strategy for due diligence, meetings with top management and the initial integration plan. In one healthcare acquisition, for example, managers used their initial knowledge of the target’s culture to make strategic decisions about the assessment of synergies and the structure of teams for integration. They also restricted the number of employees who were present at the initial meetings, as well as made other tactical decisions, such as restricting the number of functional areas that were involved.
One of the most common practices we observe in successful large mergers is an organized procedure for capturing synergies. This includes putting line leaders responsible for meeting their goals and holding them accountable for results. It also involves integrating synergies within leaders’ annual operating budgets and plans.
It is essential to have an integrated management team for the duration of the post-close integration period, which could be up to two years. This team should have the power to act quickly and access to all relevant data.
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