The deal could be completed when M&A transactions are complete however, if companies don’t properly initiate integration after the completion of the transaction, they may lose out on a significant amount of value. The most demanding and time-consuming M&A task is merger acquisition integration. A well-functioning team as well as clear communication and a solid plan are crucial to ensure the success.
Planning for integration ahead of time can avoid many of the issues that companies face when integrating. Integrating systems, for example requires careful analysis of issues such as data ownership, process sync, and more. It is essential to have early IT solutions to enable the new unified business to realize benefits quickly. Planning should start during due diligence, and the PMI Framework should be finalized before the deal is closed. Additionally, the key to success with PMI is to identify and track key integration milestones to track progress and keep an eye on the intended outcomes of the deal.
A common mistake is to integrate too many. This can be detrimental to the value of the acquired business by altering the aspects of the acquired business that made it attractive. Companies that acquire businesses often underestimate the time required to successfully integrate a newly acquired company.
Another common mistake is to not examine the culture and norms of work thoroughly enough. Conflicts can occur if, for instance, the cultures of two different organizations are completely different. To avoid such issues the acquirer can begin assessment during the due diligence phase by bringing in some key people from the target company to examine their culture and work practices. This can be very helpful in determining the kind of integration strategy that will be needed following the closing.