Risks of Mergers and Acquisition Integration

A robust decision-making process is essential to make decisions to coordinate work streams and set the pace for a fully integrated company. This should be supervised by a highly skilled professional with https://reising-finanz.de/why-is-ma-integration-increasingly-critical-for-every-company-or-organization/ strong leadership skills and a process, possibly a rising star within the new organization or a former leader of one of the acquired companies. The person chosen for this role must be able to devote 90% of his or her time to this task.

Insufficient communication and coordination will slow the process of integration and rob the new entity of accelerating financial results. Markets expect early and substantial signs of value capture, and employees might interpret the delay in integration as a sign of instability.

In the meantime the core business has to remain the main focus. Many acquisitions can generate revenue synergies that require coordination between business units. For example, an established consumer products company who was limited to a handful of distribution channels could join forces with or acquire a company with different channels in order to gain access to new customer segments.

Another risk is that a merger can consume too much of the attention and energy of a business which can distract managers from their business. As a result, the company is harmed. Finally, a merger or acquisition can fail to tackle cultural issues – a key factor in employee engagement. This can lead both to problems with retention of talent and the loss of customers who are important to you.

To reduce the risk of these, you must clearly identify the financial and non-financial outcomes that are expected and when they will occur. Then, parcel out these goals to the different taskforces that will be working on the integration to accelerate and bring one integrated company on time.