Merger & acquisition III – The integration

You did it. You have found a great company, there is a good click, and the acquisition has been completed. Now it’s time for the next step. It is important to properly integrate the company into the existing organization. Before the takeover you have looked carefully at the opportunities and which synergy can be realized. Time to use those possibilities and opportunities. Experience shows that the first 100 days are of great importance. In short, time for action. In this blog a number of points for a good start on the integration of acquired company into the existing organisation.

Attention

The integration process is complex. It provides a considerable amount of stirring for both the acquiring party and the acquiree. Employees may wonder if they can stay, and management faces the challenge of achieving the right synergy. Research shows that attention to cultural differences, proper planning, clear communication and attention to staff are important to make the acquisition a success.

The right team

Integration can be seen as a project. It requires a project-based approach with an associated (project) team. Experience shows that a number of things are important.
Firstly, correct team composition is important. For example, a certain seniority in the team is required, so that they have the upper hand when taking unpopular measures.
Secondly, the objectives must be clear to both organizations. In this way both parties work towards the same goal.
Thirdly, monitoring performance is important. This may be a bit tricky in the beginning, but it is advisable to start immediately after the acquisition. As a result of an acquisition, for example, you operate in a larger market or even in a new market. There are often slightly different rules and trends here than you are used to, so make sure you keep an eye on this.
Fourth, no integration process is the same. There will be things that don’t go as planned, while some things run much smoother than expected. Learn from the mistakes and enjoy the successes. This not only helps with the current integration process, but also with possible subsequent acquisitions in the future.

Communication

Perhaps the most important aspect during a merger or acquisition process is communication. This starts from the moment of the announcement of the impending merger or acquisition into the integration process. Make sure you communicate clearly with all parties involved. These are turbulent times that cause uncertainty among stakeholders, employees and suppliers. Involve everyone in the process and communicate clearly which steps will be taken. Tell how, and which “milestones” have been achieved during the process. This way, you ensure that every stakeholder remains involved in the process and the integration process is speeded up.

Value creation

Value creation actually begins from the moment the integration starts. Synergies can be achieved immediately by, for example, integrating certain functions or business units. In addition, both corporate cultures must also be examined and the existing and new staff must get to know each other. Pay attention to matters such as working conditions, diversity, openness, work pressure and the style of leadership within both organizations. You may have access to larger or new markets thanks to a merger or acquisition. Or maybe there are new products that you can offer. You can create new product-market combinations. This way, existing or new markets can be explored.

Conclusion

Based on the findings in our triptych we can divide a merger or acquisition process into three different phases, namely the search, the transaction and the integration. It starts with searching for the perfect match. Have you found the right candidate? Then contacting, negotiation and finally the transaction takes place. After this, the actual value creation starts with the integration. That is why it is important to give the integration process just as much attention as the two previous phases.

Are you looking for a company to take over? Or maybe you are about to sell your business? Feel free to contact us to see what we can do for you. Our contact details can be found here.