M&A Integration

Why does it so often fail?

M&A IntegrationAgenda

• What happens in an M&A Process?• Why do they succeed? Or, more usually fail?• What should happen?• Examples—Good and Bad• Top Tips to make it work

The M&A Process

Essentially six major steps1. Formulate2. Locate3. Investigate

4. Negotiate5. Integrate6. Long Term Development

(Merger repair?)

Why do so many M&As fail?

Paper by Havard Business School– Two fundamental reasons to acquire– Boost current performance– Redirect the company

Why do so many M&As fail?

“Success or failure of an acquisition lies in the nuts and bolts of integration”

What should happen: 1?

• Look at the last deal done and learn from what went well and what was a problem—ask the people on the shop floor

• Plan integration early and ensure deal team have skin in the game

• Take communication very seriously and not just as an add on

• Analyse the cultural fit

What should happen: 2?

• Have a board that isn’t afraid to pull the deal

• Use the people that “know” for the integration---bring both companies together

• Be clear about outcomes and a timetable

• Manage the integration like any other project

Examples

• Good

– Standard Chartered Bank– Drinks company HQ in UK

• Bad

– HP/Autonomy– Daimler/Chrysler

Five key tips for success

1. Determine the required or desirable level of integration

2. Select a highly respected and capable integration leader

3. Select dedicated, knowledgeable, capable people for integration team

4. Speed up decisions rather than focus on precision

5. Provide continuous communication and feedback