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Merger Acquisition Integration Best Practices

A well-planned merger acquisition integration process will help you achieve a higher percentage of the value of your deal. This is a challenging process that requires a mix of operational skills along with finance, change management and cultural knowledge to be successful. The companies that do it right have the potential to earn 6 to 12 percent more total returns to shareholders than those who don’t.

The acquiring company should begin thinking about integration as early as it is possible during the negotiation and diligence phases. A review of the culture of the target will assist in shaping your approach to due-diligence meetings, top management meetings, and the initial planning. In the case of one healthcare acquisition for instance, managers used their initial insight into the target’s culture to make decisions on strategic issues such as how to assess synergies as well as structuring integration teams. They made tactical choices like limiting the number of people attended the initial meetings, and limiting the number functional areas.

One of the most common practices we observe in successful large mergers is the use an organized method for capturing synergies. This includes putting line managers in charge of their objectives and requiring them to be accountable for the results. It also involves the integration of synergies into leaders’ annual operating plans and budgets.

It’s critical to have a well-integrated management team for the duration of the post-close integration period, which could be up to two years. The team must have the authority to act swiftly and have access to all relevant information.