The deal could be concluded after M&A transactions are concluded however, if businesses don’t properly initiate integration following the closing of the transaction, they may lose out on substantial value. The most time-consuming and difficult M&A task is merger acquisition integration. A well-functioning team, a cohesive and well-defined communication, and a well-constructed plan are all vital to success.
A lot of the challenges companies confront during integration can be avoided through pre-integration planning. For instance the process of integrating systems requires careful consideration of data ownership, process synchronization, and other issues. The need for early IT solutions is 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 deal is closed. The most important factor to PMI success is to determine and track important integration milestones to track progress and focus on the intended outcome of the transaction.
One of the most common mistakes in integration is integrating too much, which can destroy value by fundamentally altering aspects of the acquired company that made it attractive initially. In the same way, companies that acquire underestimate the length of time it takes to successfully integrate an acquired company.
Another mistake that is common is to not assess the working and cultural norms in depth enough. Conflicts can occur if, for instance, the culture of two different businesses are completely different. To avoid this the acquirer can begin assessment during the due diligence process by bringing in some key people from the target company to assess their culture and work habits. This can be extremely helpful in determining the type of integration strategy that will be needed following the closing.
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