Integration is a critical stage in M&A. It has also proven to be one of the most difficult. In fact, a recent study found that M&A companies are between 12 and 18 percent less likely to feel that they have the necessary capacities and capabilities for integration than any other stage of M&A.
The most effective way to overcome this challenge is clear communication of the rationale for the deal and the integration tactics. This will ensure that everyone is aware of what is expected from them and http://www.virtualdataroomservices.info/what-is-deal-flow-management/ how M&A will benefit their business.
Additionally, it is important to follow best practices that are specific to the objectives of the deal. For instance, using the same team of professionals who performed due diligence for the M&A for the post-merger integration assures continuity, eliminating duplication of effort and also reducing time.
Another issue is keeping momentum during the process of integration. The integration team must ensure that growth is not compromised in the process of the integration of the companies. Moreover, this requires a thorough understanding of the M&A business’s operations to ensure that the integration team can make decisions that have the least impact to day-to-day activities.
A solid governance structure is also required to monitor and capture synergies. This involves forming an M&A leadership team (which must include both companies’ representatives) and establishing and implementing a plan of integration, and establishing an explicit accountability. M&As that implement these best practices for integration could provide up to 6 to 12 percent higher total returns for shareholders than those who don’t.