Delivering an Acquisition or Merger: a 10 Step Plan for Success

morgan | 08 Feb 2023 | News | Deliver Change

Companies spend more than $2 trillion on acquisitions each year, yet the M&A failure rate is between 70% and 90%! Delivering an Acquisition or Merger can be one of the hardest changes a business will experience.

These costly deals require a great deal of due diligence before the deal is closed. Nevertheless, M&A deals do fail, whether it be due to cultural differences or integration issues, among other things.

Without a plan, there is a real danger of confusion, delays, and ultimately, the merger falling through. Here’s our 10-step plan to a successful M&A.

  1. Organizational structure: Deciding on the new organizational structure of the merged entity is important to ensure that everyone is aligned and working towards the same goals.
  2. Communication plan: Keep clear and consistent communication, it is vital to keep employees, shareholders, and other stakeholders informed and engaged.
  3. Governance: It’s also important to have in place strong governance and risk management to provide clarity of roles, responsibilities and accountabilities as well as clear decision making and escalation routes.
  4. Due diligence: Look at the financial, legal, and operational aspects of the merging companies is essential to identify any potential risks or issues.
  5. Benefits: Remember the rationale for the merger in the first place. It may be about cost synergies or could be about access new markets or capabilities. Don’t get caught up in the process and forget to focus on the original benefits.
  6. Integration management: Establish a dedicated team to manage the integration process and give them responsibility for working with the business to ensure that all aspects of the plan are executed effectively.
  7. Cultural alignment: This may take time, as this can be the reason why mergers go wrong. This be achieved by identifying and communicating the shared values, goals and vision of the merged entity. Inclusive, open communication and collaboration among employees will be key for them understanding and adapting to the new culture, and providing training and support to help employees understand and adapt to the new culture.
  8. IT integration: This can be a key source of cost synergies but also a key stumbling block, so it needs to be approached carefully. A roadmap needs to be developed to ensure that systems can be easily integrated to minimize disruptions and ensure that the merged company can continue to operate smoothly.
  9. Regulatory compliance: Ensure that they are in compliance with all relevant laws and regulations, and that the merger will not create any legal or regulatory issues. This can be a stumbling block as businesses may need to be sold in order to comply, and this can also slow down progress in the Competitions Authority get involved.
  10. Change management: Mergers can be unsettling and disruptive for employees, especially if cost synergies are part of the rationale. Appropriate change management techniques will help to communicate the vision and rationale for the merger as well as help the teams to get behind the merger as time progresses.

Finally, complete a post-merger integration review, it’s is important to conduct a review to evaluate the success of the integration plan and identify any areas that need improvement.

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Who would benefit?

Some Businesses would benefit the most from getting integration support from a consultancy. These types of transactions can be complex and challenging, and not everyone will have the expertise, nor will they want to build that for a one off event potentially.

Here are a few examples of businesses that would benefit from integration support:

Businesses that may benefit from support;

  1. Large companies with a high degree of complexity in their operations. They may struggle to coordinate the process internally, and could benefit from the expertise and resources of a partner.
  2. Smaller companies that are acquiring or being acquired by a much larger company. They may lack the internal resources or expertise to navigate the complexities of the integration process and would benefit from external support and guidance.
  3. Companies that are merging who may have different cultures or operate in different countries, may need help bridging the gap between different cultures and business practices.
  4. Companies with high-stakes mergers that have a direct impact on their industry or the economy, who would like an insurance policy to minimize the risk of failure and maximize the chances of success.

Having helped many companies navigate their integration, it is critical to take the time to thoroughly consider these 10 factors and incorporate them into your integration plan for a smooth and successful merger.

Some businesses will have a strategy that is inorganic, and mergers and acquisitions will be a core part of what they do.

In time, they may be able to develop a robust model to help them seamlessly integrate new companies or they may choose to allow those business to stand alone with minimal interference.

About Curium Solutions

Curium Solutions is an award-winning business transformation company. Its mission is to empower people and organizations to achieve their personal and business potential, helping them turn strategic priorities into reality through successful transformation. We does this by:

People first – putting people front and centre because if they change, then organisations change too.

Keep it simple – keeping things simple and jargon-free helps to accelerate the pace of change and ensure that it can be sustained.

Make it real – improving and supporting client capability with our award-winning digital performance solution ensures that the change is realized and sticks.

Two core practices – Change Solutions and People Solutions – combine to drive fast and sustainable change in individuals and teams.

Clients include: Halfords plc, Tesco plc, Sainsburys Argos, DAC Beachcroft LLP, National Express plc, Zurich Insurance, Kingfisher plc, Arriva Rail, Waterlogic plc, O2 and Lidl, alongside U.S. based clients NASA, Pepsi Co., and various Federal Agencies including the FBI and CIA.

For further information, contact us below.

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