Merger Acquisition Integration (M&A) Mistakes
When M&A transactions are completed and the deal is complete, but if companies do not initiate post-closing integration in a timely manner, they miss out on a significant value. The most time-consuming and challenging M&A task is merger acquisition integration. A functioning team as well as clear communication and a solid plan are vital to ensure the success.
Pre-integration planning can eliminate many of the issues that companies face when integrating. For instance, integrating systems requires careful consideration of ownership of data processes synchronization and other issues. The need for early IT solutions is to allow the new unified business to reap the benefits quickly. Ideally, planning should begin during due diligence and then the PMI framework should be completed prior to closing the deal. Moreover, the crucial element to success in PMI is tracking and identifying key integration milestones to track progress and concentrate on the intended outcomes of the deal.
A common mistake is to integrate too many. This destroys value by changing the aspects of the acquired business that made it attractive. Companies that acquire companies typically underestimate the time it takes to successfully integrate a newly acquired business.
Another mistake made is not evaluating the culture and norms of work in sufficient depth. For example, if the culture of two firms are very different and there are clashes, it is likely to happen. To avoid problems the acquiring company can begin the assessment during the due diligence phase by inviting key individuals from the target company to assess their work habits and culture. This is extremely useful in predicting the type of integration strategy that will be needed following the closing.
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