Integration is a critical stage in M&A. However it has also been proven to be the hardest. A recent study found that M&A companies are 12 to 18% less likely to believe they have the necessary capabilities and capacities to integrate than any other stage of M&A.
The most effective way to overcome this challenge is clear communication www.virtualdataroomservices.info/ma-virtual-data-room-for-specific-purposes/ of the deal rationale and the integration tactics. This will ensure that everyone understands what is expected of them and how M&A will benefit their business.
Furthermore, it is essential to employ best practices that are specifically tailored to the objectives of the deal. For instance, utilizing the same team of professionals who performed due diligence for the M&A for the post-merger integration will ensure continuity, avoiding duplication of efforts and reducing time.
Another issue is maintaining momentum throughout the process of integration. It is essential that the integration team fuse the companies, without compromising growth. In addition, it requires a solid understanding of the M&A company’s operations, so that the team in charge of integration can make decisions that are least disruptive to the day-to-day tasks.
It is also essential to have a strong integration governance structure that can track and capture synergies. This means establishing the M&A leadership group (which should comprise representatives from both organizations) as well as establishing and developing an integration plan and providing clear lines of accountability. M&As that integrate these best practices deliver as much as 6-12 percentage points higher returns to shareholders than those that do not.
