A well-planned merger acquisition integration process will help you achieve a higher percentage of your deal value. It is a challenging process that requires the right mix of organizational, operational, finance, change-management and cultural expertise to be successful. If you do it right, you will yield up to 12 percent higher total profits to shareholders than those who don’t.
The company that is buying should begin contemplating the process of integration in the earliest possible time, during the due diligence and negotiation phases. A thorough analysis of the culture of target companies can help shape your approach to due diligence, meetings with top management and the initial integration plan. In the case of one healthcare acquisition for instance, managers relied on their initial understanding of the target’s culture to make strategic decisions regarding the evaluation of synergies and forming integration teams. They made tactical decisions such as limiting how many people attended the initial meetings, and limiting the number functional areas.
We’ve identified a method to capturing synergies from large mergers that have been successful. This includes putting line managers in charge of their objectives and holding them accountable for the outcomes. It also involves integrating synergies within the annual operating budgets of leaders and plans.
It is essential to have a team of management members that are integrated for the duration of post-close integration. It could be as long as two years. This team must have the authority to act quickly and have access to all relevant information.