A well-planned merger acquisition integration procedure can help you realize a greater proportion of the deal’s value. It is a difficult process that requires a blend of operational capabilities, finance, the management of change and cultural expertise to be successful. If you do it right, you can deliver as much as 6 to 12 percent higher total returns to shareholders than those who don’t.
The acquiring company should begin thinking about integration as early as it is possible during the negotiation and diligence phases. A review of the environment of the target company can assist in shaping your approach to due diligence meetings with top management and the initial planning. In a healthcare acquisition, for instance, managers relied on their initial insights into the culture of the target to make strategic choices about how to assess synergies as well as structuring integration teams. They made tactical decisions such as limiting how many people were in attendance at the initial meeting, and limiting the number of functional areas.
We can see a systematic approach to capture synergies in large mergers that are successful. This includes putting line leaders responsible for reaching their goals and holding them accountable for the results. It also involves integrating synergies in leaders’ annual operating budgets and plans.
It is essential to have a management team that is integrated for the duration of post-close integration, which can last up to two years. The team should be given the power to act quickly and access to all relevant data.
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