Integration - I

The key to driving long-term stakeholder value is efficient, strategic and well-paced integration.

Avoid the common pitfalls of post-merger integration
Customer retention and the alignment of organizational responsibilities are important issues.

The key to a profitable merger hinges on the successful integration of two organizations, each with its own culture, processes and operating structures. All of these disparate elements simply cannot be consolidated overnight.

Long before the deal goes through, they should start developing a detailed action plan — one that recognizes that much of the real work begins only after the deal closes.

Develop an effective plan for the integration process

A smooth integration depends on identifying, prioritizing and measuring synergies early in the process. The integration planning should start well before the transaction closes. For instance, in addition to addressing financial, legal and operating issues, due diligence should be used to prepare for integration by examining issues such as cultural fit and shared organizational values.

Companies eager to hit the ground running on Day 1 will want to develop an integration plan that encompasses the following:

Establishing a project management office to provide guidance and tools, and to drive the integration process

Assigning a dedicated team, backed by executive support, to manage the integration program

Creating a tracking mechanism to measure how well they are capturing identified synergies

Planning for workforce integration and creating a retention strategy for key personnel

Implementing a communications plan to respond to concerns and provide quick answers to questions regarding people's ongoing roles and responsibilities

Addressing customer and supplier retention issues

Establishing a plan for addressing potential cultural differences

Developing a tactical plan for the first 100 days of the new entity's operations

By devising a comprehensive integration plan at the outset, and by implementing its various elements at a managed pace, companies can enhance their chances of structuring M&A deals that deliver long-term shareholder value.

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