Six Tips to succeed in a Post-Merger Integration
In newsletter as well as through press releases we are constantly greeted with the news that company A has acquired company B. The future is always painted bright as to the position the new constellation will conquer. The market welcomes the initiative and expectations are built.
Mergers and acquisitions (M&As) are often seen as a quick way to reach growth and there is often impatience from both the owners and the board to see the expectations realized. But when we hurry, things are bound to go wrong. Perhaps the acquisition was made upon the heels of a large cash flow and a sudden opportunity; perhaps it was done as a defensive move to minimize the competitors’ possibilities to improve their positions. Many companies, however, devote much time to their acquisition strategies before it is time to carry out the actual transaction. Management consultants perform extensive market analyzes and driving forces influencing the market are rigorously studied. The acquirer’s positioning is defined, the competition is analyzed, and other possible complementary acquisitions that would fit strategically are also thoroughly dissected. When it is finally time for the acquisition the board seeks the assistance of several experts for the transaction itself; auditors and corporate finance- and legal expertise. The whole acquisition process can end up costing the company a fortune.