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SUCCESSFUL MERGERS & ACQUISITIONS

By Ruth Tearle

You are involved in a merger or acquistion. How do you ensure that it is successful? This article shows the different stages of a merger or acquisition and the problems that need to be resolved during each stage. Use this article to guide your merger team in planning a successful merger.

1. After the merger announcement.

 

Typical problems

• People stop!
• A feeling of being in a void. There is no point in making new plans or doing anything until they know what is going to happen.
• There is a vacuum of information.
• People feel they are on an emotional roller coaster.
• Competitors talk negatively about your merger.
• Sales people struggle to make sales as clients want to know what is happening first before they commit.
• Specialists attempt to get to know their counterparts in the other company, but don’t trust them.
• The ‘threat of the merger’ results in a team bonding within each company. The beginning of an ‘us and them’ mentality.
• Staff and the market keep asking "what’s happening."

 

Company led interventions

• Set up a communications committee comprising credible people from both companies.
• Find out what people’s concerns are. Listen.
• Try to stop the rumors by communicating honestly what you know AND what you don’t know.
• Publish a ‘state of the merger’ newsletter.
• Don’t make any rash promises you may not be able to keep to in the future. E.g. ‘there will be no retrenchments.’

Consultant led interventions

• External consultants could be used to help design the new structures and select people for key positions.

2. Creating a structure for the merged company.

 

Typical problems

• A feeling of loss as teams are split up and merged into new team.
• Distrust of new team members.

• The new leadership team is not working effectively.
• Unclear roles.
• Resignations of key people.
• Some people who did not get the positions they expected feel resentful.
• Low morale.
• Rumors.
• The market responds negatively to the loss of key people.

 

Company led interventions.

• Clarify structures.
• Clarify roles.
• Continue and intensify your communication program.

Consultant led interventions.

• Team building.
• Role clarification exercises.
• Help people to understand what to expect from each stage of the merger, and how to not only cope with each stage, but how to contribute to a successful merger or acquistion.

3. Gather information about each company.

 

Typical problems

• Lower levels still feel in a vacuum.
• They begin to jockey for position.
• Them and us feelings intensify.
• Customers begin to ask for combined products and services.
• Competitors exploit the ‘confusion’.

Company led interventions

• Set up project teams to investigate what you have in each company in each functional area with regard to:
  • Policies & procedures.
  • Products & services.
  • Systems.
  • Structures.
  • Brands.
  • Staff benefits.
  • IT.
• Project teams look at what both companies offer, compared to what the 'World’s Best' are doing. They then develop proposals for systems/policies/procedures for the new merged company.
• Once agreed, develop a program for implementing your new policies, procedures and structures.
• Keep communicating progress.

Consultant led interventions.

• Consult with specialists on what the 'World’s Best' are doing in terms of each project. (A merger is a good opportunity to start afresh.)

4. Merging the operations.

 

Typical problems

• Stress (operational plus integration tasks have to be done simultaneously.)
• People complain the old was better. People long for the past.
• Them and us continues.

Company led interventions.

• Project managing the changes.
• Ensure ‘hot button' issues are addressed.
• An integrated salary and benefit structure should be implemented as soon as possible.

5. Creating a new unified company.

Typical problems.

• Internal issues have been resolved. The company is ready to look outwards.
• Lack of a focused strategy.
• Lack of direction.
• Need to build a new culture distinct from the past cultures of both companies.
• Need to build new brands.

Company or consultant led solutions.

• Further teambuilding.
• Building a new vision of the future.
• Values creation and cascading.
• Strategic planning.
• Change management.
• Strategic alignment.
• Brand creation /management.