The deal may be closed when M&A transactions are completed however, if companies do not take the proper steps to integrate after the completion of the deal, they could lose out on substantial value. The most time-consuming and challenging M&A task is integration of mergers and acquisitions. A well-functioning team, with a solid structure, clear communication, and a sound plan are all vital to success.
Planning for integration ahead of time can avoid many of the difficulties that companies encounter during integration. Integrating systems, for example, requires a thorough analysis of issues like data ownership as well as process sync and so on. Innovative IT solutions are required to enable the new unified business to gain benefits quickly. Planning should start during due diligence and the PMI Framework should be finalized before the transaction is completed. The crucial element to PMI success is to determine and track important integration milestones to monitor progress and concentrate on the desired outcome of the transaction.
One of the most common mistakes in integration is to incorporate too much, devaluing value by fundamentally altering the aspects of the acquired company that made it attractive initially. Companies that acquire businesses often underestimate the time required to successfully integrate a newly acquired company.
Another mistake that is common is to not evaluate culture and working norms thoroughly enough. Conflicts could arise if for instance, the working practices of two companies are quite different. To avoid this the buyer’s company should begin assessing during the due diligence phase by bringing in some important people from the target company to analyze their culture and work practices. This can be very helpful in determining the kind of integration strategy that will be needed when the deal is completed.