The 10 steps to successful M&A integration
After completing merger or acquisition one always strives for measuring whether whatever was envisaged was achieved in defined timeline or exceeded or lagging. Success lies in measuring those points so corrective measures can be taken if needed. Mergers and acquisitions-well conceived and properly executed-can deliver greater value than ever immediately. Bain analysis of quite 24,000 transactions between 1996 and 2006 shows that acquisitions completed during or simply after the 2001–2002 recession generated almost triple the surplus returns of acquisitions made during the preceding boom years. ("Excess returns" refers to shareholder returns from four weeks before to four weeks after the deal, compared with peers.) This finding held true no matter industry or the dimensions of the deal. Given today's relatively low equity values, acquirers with cash to take a position are likely to seek out deals that produce similar returns. Tough this measure is very important for shareholder point of view it is also depending on market scenario. Cash is one of the best measures for comparison purpose. We all know that there are several factors which can influence results and even though all major milestones are achieved desired result may not come. This scenario effect can be reduced to low level if initial risk assessment also covers probable scenarios after merger or acquisition. If these things are predicted, then actual measures can also be thought off beforehand. 10 essential guidelines can make the task much more manageable and cause the proper outcome: 1. Follow the cash. As mentioned above this is real practical measure and can also help future growth. All cash targets must be part of M&A objective with absolute numbers with variability seen considering risk assessment. 2. Tailor your actions to the character of the deal. This is must do not go by your experience if the scenario does not fit well. Action must match issue and not general. 3. Resolve the facility and other people issues quickly. This is essential as this creates hurdles in progress of achieving our targets. Do not impose but create nice hard but amicable convincing solutions. 4. Start integration once you announce the deal. Since decision is taken all pre-actions planned must be executed to get streamlined pathway. 5. Manage the mixing through a "Decision Drumbeat" decision lingering is most dangerous. 6. Handpick the leaders of the mixing team This will help people understanding and create positive energy. Do not consider size part of company as merged small entity may have better leaders so use them as they are now your assets.
7. plan to one culture. Very essential elements and many failures happens just due to unsuccessful culture merger. Great team lead from both parts can play great role. This should be one major action and all points must be considered during risk assessment. 8. Win hearts and minds. Merger of culture can be achieved through by winning hearts and minds of people and by removing any big brother effect when one big group acquires small group. 9. Maintain momentum within the base business of both companies—and monitor their performance closely. All merger actions are important, but none should create obstacle in business running. Please note that there is no rest period for business during merger or acquisition. 10. Invest to create a repeatable integration model. Should be so convincing to self and shareholders that all round support can come and shall make future integration faster.