During M&A integration, it is one of the most crucial phases. It has also proved to be the most challenging. A recent survey found that M&A firms are between 12 and 18 percent less likely to believe that they have the capabilities and capacities to integrate than other stages of M&A.
To overcome this hurdle it is essential to clearly communicate the reason of the deal as well as techniques for integration. This helps ensure that people know what is expected of them, and demonstrates how M&A can create value for their business.
It is also essential to follow the best practices that are tailored to the specific goals of the deal. For instance, using the same people who conducted due diligence for the M&A for the post-merger integration ensures continuity, avoiding duplication of efforts and reducing the time.
Another issue is maintaining momentum during the process of integration. It is crucial that the integration team fuse the two companies without compromising growth. Furthermore, this requires a thorough understanding of the M&A business’s operational processes so that the integration team can make decisions that are least disruptive on day-to-day operations.
A strong governance structure is essential to track and capture synergies. This includes establishing an M&A leadership group (which should include representatives from both organizations), creating and the implementation of an integration plan, and establishing clear lines of accountability. M&As that implement these integration best practices can yield between 6 and 12 percent higher returns on their totals for shareholders than those that do not.
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