Postmerger integration insights our latest thinking. David cogman is a principal in mckinsey s shanghai office, and jacqueline tan is a consultant in. We have proprietary methodologies and tools to help align people, organizational cultures, and work styles to business and deal strategies. For merger integration to succeed, investing in leadership readiness is. A lighter touch for postmerger integration mckinsey. A lighter touch for postmerger integration january 2010 article. We use your linkedin profile and activity data to personalize ads and to show you more relevant ads. Bains battletested approach has supported more than 1,000 merger integration projects, from the largest, most complicated global deals to smaller scope transactions. A mckinsey perspective on organizing integrations to create value mergers offer tremendous opportunity to create and sustain breakthrough value, especially for. In any merger, acquisition, or joint venture, the sooner managers integrate their companies the faster they capture the expected synergies. Youve done your homework and found the right company with the right strategic fit.
Capturing the value of the deal is a balancing act that requires close attention to management, employees, customers, and shareholders. One major reason is that companies tend to treat postmerger integration pmi as a mechanical process that occurs after the deal is closed. Selected results from the business consulting literature on mergers and post merger integration sponsor selected results sample, methods, comparison group 7 mckinsey 2000, 2001 65%70% of deals fail to enhance shareholder value. Nov 05, 2017 whether a company hire outsiders to help or not, postmerger integration pmi is needed with every part of the business. In light of the latest developments and public health recommendations on the novel coronavirus, we have decided to reschedule the merger integration conference in new york to november 56, 2020 in nyc. The integration strategy for enterprise resource planning erp is usually a major input to the transition timelineand affects the pace of capturing full deal value. How can you master merger integration in the digital age. Post acquisition integration handbook l l 8 l baker mckenzie experience has taught us that the key to developing an effective post acquisition integration plan, implementing it successfully, and overcoming the inevitable challenges, is the early identification of the overriding strategic and business. In short, youre convinced this deal represents an excellent opportunity. Ultimately, for an acquisition or merger to create value, the combination must become more than the sum of the parts. The role of leadership in merger integration mckinsey. If you think of a corporate merger as a marriage, then you can see that there is still as lot of work left to do after the wedding date day 1.
In the model, the acquiring firm makes decisions about the level of integration and the degree of replacement of the targets top management team, and can develop a capability to manage the postacquisition integration process by tacitly accumulating acquisition experience and. This article discusses post merger integration pmi and the tradeoff between the economic benefits and costs that arise when organizations merge under a new organizational structure and. Dealmaking is hard, but integration is even harder. Bainsupported integrations outperform average deals by 18%. Post merger integration or pmi is a complex process of combining and rearranging businesses to materialize potential efficiencies and synergies that usually motivate mergers and acquisitions. Smoothing postmerger integration in our experience, establishing a clean team to support integration efforts before a deal closes can help speed up the completion of critical tasks and improve the chances of capturing the mergers synergies. If youre not careful it can drag on for months after the transaction closes. Postmerger integration pmi is critical to realizing the value of a deal. But the path to success isnt the same for every company. Realizing the synergies nils bohlin, eliot daley, and sue thomson merger and acquisition activity has grown sharply in the last five years. The first 100 days as part of our complete pmi offering developing and supporting the rst 100 days of an integration is a vital component of our comprehensive post merger integration offering. Postmerger integration framework palmares consulting. Culture and change management are among the most unpredictable factors of deal success. We join a long list of other institutions that are rescheduling events to protect the health and safety of attendees and to support the.
How the best acquirers excel at integration mckinsey. Delaying integration could risk losing prominent customers to competitors or undermine confidence in a merger. A proven and battletested rcp playbook with complementary digital solutions is critical to enabling day one readiness and business continuity, post merger or separation. Companies are using merger integration as a catalyst for achieving the full potential for both companies operations.
Post merger integration checklists acquisition integration. Merger integration in a converging world ey united states. Its also highly complex, taking place under severe time pressure and in parallel to running the core businessmaking it one of the most challenging initiatives a senior executive will ever undertake. Integration handbook 2017 postacquisition integration handbook. Through discovery and analysis, the post merger integration framework must allow for taking time to understand the customer and the target company, which is a major benefit of agile teams become efficient and much more customerpeople focused. To achieve this, companies have to approach postmerger integration with the same level of commitment and strategic intent as the transaction itself.
Explore bcgs latest thought leadership on post merger integration to develop a winning strategy that unlocks synergies quickly, and returns value to investors. Mercer post merger integration pmi hr consultants provide strategic integration planning from day one. A pre merger process that targets companies with the right capabilities, gets the deal done and begins the integration through rigorous planning and building of trust among the players. Capgemini consulting has broad experience in supporting external growth initiatives throughout the. Thomaskautzsch,partner 82% 60% 46% t h ec al ng sof pmi thesoftfactorsdetermine success stabilizationof theorganization cultural integration operational synergies. Exclusively focused on post merger integration and separation, gpmip delivers projects at greater efficiency than traditional consulting firms, maximizing capabilities, experience, and expertise. By concentrating on five issues, ceos and top teams can increase the odds of a genuinely happy. Smoothing postmerger integration in our experience, establishing a clean team to support integration efforts before a deal closes can help speed up the completion of critical tasks and improve the chances of capturing the merger s synergies. Youve considered all of the likely market reactions. Integration handbook 2017 postacquisition integration.
Together, well avoid risk and identify opportunity from due diligence to postclose value capture. Yes, every part sales, marketing, finance, it, hr, manufacturing etc. Led the postdeal merger integration effort for multiple technology acquisitions while working in the media industry, focused on intellectual property assessment and patent harvesting, it, product operations, organization design, cost avoidance reporting and justification, knowledge transfer, and the integration management office. The elusive art of postmerger leadership mergers that appear to be successful in the short term often destroy value later on. When it comes to acquisitions, some asian companies are forging a novel path through the thicket of postmerger integration. Critical requirements, including, risks, timing, and deal objectives, are carefully mapped out. A post merger process that seeks to capture welldefined sources of value and is led in a way that captures as much value as possible as quickly as possible. Integrating merging companies requires a daunting degree of effort and coordination from across the newly combined organization. How you lead your organization through an integration following a merger or acquisition can make or break the original deal. If an integration fails, poor culture and change management are often to blame as a majority of deal makers struggle with.
A wellthoughtout strategy will provide a clear road map for the integration and eliminate the tendency to revisit directional decisions. Our post merger integration checklists have been gleaned from our acquisition integration playbooks. Successfu sl ael s force integration asl o requrei s exceell nt executoi n of the basci s, incul dni g detaeli d pal nnni g percent of respondents n 89 need to improve integration of sales capabilities exhibit 3 source. For example, in a recent merger of two distribution companies, transitioning to the target companys erp was central to the deal rationale. Post merger integration pointofview april 2017 merger integration in a converging world. To help our clients with these challenges, baker mckenzie has released the 7th edition of our post acquisition integration handbook, a practical reference tool for companies contemplating, or in the process of executing, a multinational business acquisition and integration. Achieve postmerger integration pmi excellence with a postmerger integration pmi plan. Postmerger integration insights our latest thinking bcg. Jan 26, 2015 we use your linkedin profile and activity data to personalize ads and to show you more relevant ads. More free checklists can be accessed by downloading our playbooks. For example, in one healthcare deal, the acquirer began its assessment of culture during the duediligence process. Based on postmerger integration pmi hbr and mckinsey, bain, bcg, a. Post merger integration framework by exmckinsey consultants. By david cogman and jacqueline tan open interactive popup.