Integration is a crucial stage in M&A. It has also proven to be one of the most difficult. In fact, a recent study discovered that M&A companies are between 12 and 18 percent less likely to think that they have the proper capabilities and capabilities to integrate as compared to other stages of M&A.
To overcome this challenge, it is important to clearly explain the reasons of the deal as well as strategies for integration. This will ensure that everyone understands what they are expected to do and how M&A will benefit their business.
Furthermore, it is essential to follow best practices that are specific to the specific goals of the deal. For instance, utilizing the same team of professionals who performed due diligence for the M&A for the post-merger integration ensures continuity, preventing duplication of effort and also reducing time.
Another issue is the need to keep momentum during the process of integration. The team in charge of integration must ensure that growth is not lost in the process of integrating the two companies. In addition, it requires a deep understanding of the M&A company’s operations so that the integration team can make decisions with the least impact to the day-to-day tasks.
A strong governance structure is also required to capture synergies and track them. This means forming an M&A leadership team (which should include both the organizations representatives), creating and the implementation of a plan for integration, and providing an explicit accountability. M&As that incorporate these integration best practices deliver as much as 6 to 12 percentage points higher total returns to shareholders than those that do not.
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