June 10, 2015
How to Achieve Post-Merger Integration Success
Deloitte’s recently released survey report focuses on post-merger integration based on the input of more than 800+ executives. The report examines common success and failure factors, and what companies can do to increase the likelihood of deal success. Additionally, the survey report reveals findings and success factors around synergies, integration readiness, organization, operating models and communication.
– Almost 30% of respondents said that their post-merger integration fell short of success.
– When asked about synergies, 29% of respondents indicated that they exceeded synergy targets, while 18% said they fell short. An additional 10% weren’t sure if they met their targets.
– Respondents concurred on the key drivers for successful integration: executive leadership support, involvement of management from both sides, development of a project plan that often included creating a dedicated integration team, and communications.
– Ensuring a smooth transition from beginning of the merger–the day the deal closed and the combined entity became operational–correlated very highly with overall success.
– The inability to deal with unexpected challenges was the primary factor that doomed combinations. Delays and lack of preparedness also being key reasons that some integrations fail.
– In the future, respondents said they would focus on a swifter and phased post-merger integration, better communication, and a more rigorous process to select an integration team. They also said they’d allocate more budget to the integration.
See also this FEI article and additional resources in our “Integration” Practice Area.