Merger Acquisition Integration Best Practices

Posted on: January 21st, 2024 by Cathy Caldwell No Comments

A well-planned merger acquisition integration process will help you increase the percentage of the value of your deal. This is a complicated process that requires the right mix of organizational, operational, finance, change-management and cultural expertise to be successful. When you’re doing it right, you will yield up to 12 percent more total returns to their shareholders than those who don’t.

The acquiring company should start thinking about the process of integration as soon as is possible, during the due diligence and negotiation phases. An assessment of the culture of the target will aid in shaping your approach to due-diligence meetings with top management and initial planning. In a healthcare acquisition, for instance, managers used their initial knowledge of the target’s culture to make strategic decisions regarding the evaluation of synergies and forming teams for integration. They made tactical choices such as limiting how many people attended the initial meetings and also limiting the number of functional areas.

One of the main practices we see in successful large mergers is a structured process for capturing synergies. This involves putting line leaders responsible for achieving their goals and making them accountable for results. It is also about integrating synergies into the annual operating budgets of leaders and plans.

It is crucial to have a management team integrated throughout the duration of post-close integration. This could be up to two years. This team must have the authority to act swiftly and have access to all relevant information.