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Mergers are always accompanied by high expectations but often also by fears. Numerous studies have confirmed that more than half of all mergers fail. The value of the combined organisation is usually significantly lower than the value of the individual companies. Goals such as realising synergies, developing new customer segments and sales markets, accessing know-how and technologies, and securing important raw materials and supply chains are often not achieved at all or only partially.
Mergers usually fail not because of a hasty selection of candidates or a lack of preparation but because of unrealistic goals and poor post-merger project management. In international mergers, different corporate cultures and cultural differences add to the complexity. Each merger is unique, and the acquisition scenario is different. A methodical and consistent approach is therefore crucial. For a merger to have a chance of success, it is important to understand the starting position, the environment and the motivation of the two original companies for the subsequent integration and to take this into account in the integration approach. The fundamental drivers of the integration should be analysed in depth to integrate the different facets into a holistic PMI approach:
Figure 1.: Elements of the integration
Just as the decision to make an acquisition should be based on a sound valuation as part of the due diligence process, it is necessary to define and consistently pursue a clear integration strategy for the post-merger phase. The post-merger integration (PMI) approach aims to strike a balance between time-critical initial actions immediately after the contract is signed and the long-term positioning of the new combined organisation for growth-oriented business transformation and value creation. In particular, the following action areas should be prioritised:
In the planning phase (1), concrete integration goals are defined by the M&A team, including a business rationale, a transparent evaluation system, and a plan for the first 100 days of parallel business operations. The design and integration phase (2) focuses on implementing this plan and integrating processes, structures and technologies. The third phase (3) concentrates on sustainable reorganisation and optimisation for long-term process and system adjustments. Ideally, projects should last no longer than 12-18 months to quickly transfer the business units to their operational responsibility in line with the principle of “Speed with Purpose”.
Figure 2.: The elementary phases of post-merger integration
A central programme management system should be established for all phases. Even before Day 1, there must be clarity about the organisation’s responsibilities. The focus should be on the stability of the day-to-day business and transparent communication with customers, suppliers and, most importantly, the organisation’s own team.
If you want to master your integration processes and achieve your merger goals, you need a concrete roadmap that takes the following points into account:
In conclusion, the path to successful integration is a continuous learning journey that requires expertise and strategic insight. To further develop your skills in this key area, we recommend the following specialised training programmes: Certified M&A Associate (JV&A) and Certified M&A Integration Associate.
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