Integration is a critical stage in M&A. It also has proven to be the most difficult. In fact, a recent study found that M&A companies are between 12 and 18 percent less likely to think that they have the appropriate capacities and capabilities for integration than for any other stage of M&A.
A key to overcoming this issue is clear communication about the rationale behind the deal and integration strategies. This will ensure that everyone is aware of what is expected from them and how the M&A can benefit their company.
It is also essential to employ the best practices tailored to the specific goals of the deal. It is essential to use the same individuals who performed the due diligence on the M&A deal for the post-merger implementation. This ensures continuity and prevents duplicate efforts.
Another issue is maintaining momentum during the process of integration. It is essential that the team integrating the two companies without compromising growth. This is why the integration team is fully aware of the M&A firm’s operations so that they can make decisions that have page the least impact on day-to-day operations.
It is also necessary to have a strong integration governance structure that can track and capture synergies. This includes setting up the M&A leadership group (which includes representatives from both organizations) in addition to establishing and implementing an integration plan, and establishing clear lines of accountability. M&As that integrate these best practices will yield as high as 6-12 percentage points more in total returns to shareholders than those that don’t.
