During M&A integration, it is among the most crucial steps. However it also has proven to be the hardest. In fact, a recent study discovered that M&A companies are between 12 and 18 percent less likely that they have the necessary capacities and capabilities for integration than for any other stage of M&A.
To overcome this obstacle, it is important to clearly explain the reasons of the deal as well as techniques for integration. This will ensure that everyone is aware of what is expected from them and how M&A can bring value to their business.
It is also essential to apply the best practices suited to the goals of the deal. For example, using the same team of professionals who performed due diligence for the M&A for the post-merger integration is a way to ensure continuity, avoiding duplicate efforts and reducing time.
Another issue is keeping momentum throughout the process of integration. The integration team must ensure that growth is not lost in the process of the integration of the companies. Furthermore, this requires a deep understanding of the M&A company’s operations so that the integration team can make decisions with the least impact on day-to-day operations.
It is also crucial to have a strong structure for governance of integration to monitor and record synergies. This involves forming an M&A leadership team (which must include both companies as representatives) and establishing and creating a plan for integration, and providing clear accountability. M&As that integrate these best practices will yield as high as 6-12 percentage points more in total returns to shareholders than those that don’t.