Integration - 1

the major activities in integration can be described in the following sequence.

Premerger planning
Addressing communication issues
Defining the new organization
Developing staffing plans
Functinal and departmental integration
Building a new corporate culture

Premerger planning

By doing premerger integration planning, the buyer will have an opportunity to insert into agreement the apprpriate representations and warranties as well as conditions that facilitate postmerger integration process. The planning process creates a blueprint for a post merger integration organization that will be assembled immediately after the closing.

Part of the integration planning exercise is carried as a part of the due diligence exercise. One responsibility of the due diligence team is to identify ways in which assets, processes and other resources can be combined in order to realize cost savings, productivity improvements, or other perceived synergies. Valuation of the target involves estimating the rate at which the expected synergies may be realised. This step needs that how and over what time period the integration will be implemented has to be thought of as a plan to give numerical estimates of magnitude and timing of the cash flows of the combined companies