The successful preparation and execution of a M&A Transaction may already be quite demanding, nevertheless it is the 'easy part', because the subsequent integration has proven to pose much greater challenges.
Although the situation has somewhat improved in recent years, still today a large portion of M&A transactions do not deliver the value expected, or may even still fail completely, due to difficulties during integration.
Potential problems faced during an integration are e.g. :
- Too optimistic assumptions in terms of synergies.
- Expected growth opportunities do not materialize as fast as expected, or not to the extend as expected.
- Delays in implementation of changes, e.g. due to lack of resources.
- Distraction of management and employees by internal matters and therefore loss of market focus and/or reduction in productivity.
- Not sufficient support by some of the relevant stakeholders, which may even turn into obstruction.
- Increasing attrition rate and the 'good performers' often leave.
The most crucial and often underestimated aspect is the Cultural Integration. If a merger involves different countries, the cultural integration has to cover the potential differences in National Culture as well as Corporate Culture.
Difficulties often start already in much earlier phase, as no or only a limited Cultural Due Diligence is being done. But as culture integration plays a critical role in bringing the two organisations together, it is a well invested effort to achieve the business results aimed for. Managing the cultural integration consciously also helps to reduce the attrition rate during integration.
Like turnarounds, post-merger integrations are amongst the most demanding transfor-mation projects due to their degree of complexity, and they require additional capabilities in terms of leadership.
Therefore, selection of the 'right' person in terms of personality, competencies, as well as seniority for the role of the Integration Manager is of crucial importance.
Post-merger Integrations were either executed, or tarnished integrations were recitified as part of the engagements in :
In addition, some other - preponderantly smaller - integration projects had been executed or supported.