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A well-planned merger acquisition integration process can help you to increase the proportion of the deal’s value. This is a complicated process that requires the right mix of organizational operational, finance, change-management and cultural skills to succeed. Those who get it right can yield up to 12 percent more total returns to shareholders than those who don’t.
The acquiring company should begin planning the integration process as early as possible during the due diligence and negotiation phases. An assessment of the culture of the target can aid in determining your approach to due diligence meetings at the top of management as well as initial planning. In one healthcare acquisition, for instance, managers relied on their initial knowledge of the target’s culture to make strategic decisions about how to assess synergies as well as structuring integration teams. They made tactical decisions such as limiting how many people were present at the initial meetings and limiting the number of functional areas.
We’ve identified a method to capture synergies in large mergers that are successful. This involves putting line managers in charge of their objectives and requiring them to be accountable for their outcomes. It also means integrating synergies into the annual operating plans of leaders and budgets.
It’s critical to have a well-integrated management team for the duration of the post-close integration period, which could last up to two years. This team must be given the authority to act swiftly and have access to all relevant information.