And The Two Became One – Mergers and Acquisitions

Recently one of my clients was approached by a competitor with a merger proposal aimed at broadening market share, maximizing economies of scale and increasing profits for both companies. As my client discussed the preliminary details of the possible merger, I could see how this deal could turn the two average organizations into one industry leader. But for this, or any, merger to succeed the leadership team would need to have a clear vision and a strong management group to make it happen. 

Approximately two out of every three mergers and acquisitions fail to achieve their intended goals or to live up to their financial promise. Therefore, I recommend that leaders take great care when considering a merger. Here are a few things to consider when contemplating a merger.

Meet with the managers of the other organization as early in the process as possible to build relationships with the leaders who may become leaders in the new company. 

Develop a strategy for bringing the two organizations together. Include short and long term goals and a plan for restructuring the organization. 

As soon as it is legally feasible, announce the merger to employees. Chances are they have been whispering about it anyway, so put the rumors to rest. 

As with any union, there will be conflict. Yet, in this environment internal conflict could be toxic. Address it head-on and deal with it immediately. 

Assess the cost of a merger including human capital, financial expenditures and unanticipated costs. 

Assemble an experienced group of independent consultants to gather, analyze and appraise data for integration planning. 

Mergers and acquisitions come with a great deal of risk; but when it is done right, the new organization has the potential to become, and remain, a powerhouse within their industry.

 What do you think, we want to hear from you?