POST

MERGER
ISSUES
BY ADVAIT GAIKWAD
IMPACTS OF
MERGERS

 Mergers can make companies

stronger by expanding their
consumer base, reducing
marketplace competition and
creating value that is greater
than each company offers
individually. Before you enter
into any deal, it's important to
think about the effect of a
merger and acquisition on
employee performance.
 Benefits of mergers and acquisitions
 Revenue may increase with the elimination of redundant costs.
 Potential market share increases, either across geographic borders or through loyal consumers
willing to look at new products developed as a result of the merger or acquisition.
 Reduced competition can increase profit margins and spur innovation.
 The companies gain access to new resources and human capital previously held by their
competitor.
 Brand visibility may increase.
 Stock prices may rise as a result of the combined assets and reduced costs.
 Incremental growth may come more easily as a result of the above benefits.
 WHAT GENRALLY HAPPENS?
The process of combining two or more organizations into a single organization involves several organizational systems,
such as assets, people, resources, tasks, and the supporting information technology. The process of combining these
systems is known as 'integration'. Integration Planning is one of the most challenging areas to address pre-close during a
merger or acquisition.Even though culture clash between companies can cause integration problems, only 4% of the
executives in a survey by Pritchett, LP reported that their organizations include culture-specific questions in their due
diligence checklists.[Culture specific due diligence may include cultural screening and creating a cultural profile of the
target firm. GE Capital conducts a cultural assessment of prospective candidates against metrics such as trust in existing
managers, language barriers, and operating processes to then facilitate a culture work out session between both sides.
An example of a typical structure for an integration consists of three layers: a steering committee, an integration
management office (led by an integration manager) and a variety of additional teams organized by function (i.e. sales,
human resources, finance, and information technology, etc.) and/or by business unit, product line, process, or
geographic location.
 POST MERGER ISSUES

• Lack of Pre-Planning.
• No Formal M&A Integration Strategy.
• Failure to Prioritize Workstreams.
• Senior Leadership Void.
• Weak Communication Planning.
• Poor Synergy Program Management.
• Inadequate Resourcing.
• No End-State Transition.
 Qualities and skills to succeed as an M&A
integration leader
 Rapid problem‑solving skills
 Understanding of the business and functional areas
 Ability to communicate effectively, with strong interpersonal skills
 Trust of top management, with the authority to make timely decisions
 Ability to think strategically
 Understanding the big picture, with an eye for detail (microscope and telescope views)
 Ability to influence corporate opinion and key stakeholders