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The most important way to ensure achievement of mergers and acquisitions is to make sure the integration process with the other company is successful. While this may not be the most exciting aspect involved in merging companies together, it is by far one of the most important phases. Companies need to focus tasks on the integration process and make sure not to over-look it in practice.
Two of the big four accounting firms, Ernst & Young (EY) and PricewaterhouseCoopers (PwC), provide steps and insights into how a company can ensure a positive and effective integration post-merger. Ernst & Young listed five key practices that companies should follow to produce successful integration. These insights included advice for companies to concentrate on the core functions, which include front office operations such as marketing and sales. This will help guarantee that main drivers such as growing scale and geographic expansion are met and maintained effectively. They also suggest that companies balance the fundamentals; companies should speed up, speak up, and start a second wave, as well as acquire the right manager for the job. EY also stresses that companies should never stop learning from the experience and that “…evaluating the success of a deal after integration is crucial.” (EY.com)
There is a lot of overlap between what EY stresses and the seven tenets of successful integration that PwC lists off. These include instruction and tips for companies to speed up the transition, establish leadership at all levels, and communicate with all stakeholders. There are also some points listed by PwC that are not covered by EY, involving defining an integration strategy that the company will adhere to during integration. Companies also should focus on priority initiatives, plan the integration, prepare for day one early, and manage the integration as a business process by remaining focused on the key milestones associated with each merger or acquisition. (PwC.com)
As the number of mergers and acquisitions increases, it will become pertinent that companies put a hard focus on the integration process post-merger. This will be the foundation for a more successful joint company leading to a better bottom line, market share, and increased growth. To learn more on mergers and acquisitions specifically, check out the blog post Evaluation of Cross-Border Mergers and Acquisition.
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