Merger Acquisition Integration (PMI) Success Factors

An acquisition can be an effective strategic tool to increase market share, increasing capabilities or gaining an edge over competitors by leveraging cost merger acquisition integration efficiencies. Many acquirers fail to fully integrate their new entities into the existing business. This can lead to negative long-term consequences. This article outlines the critical success factors of merger acquisition integration (PMI) which will ensure a high-performing and successful integration.

PMI should begin with a clear and concise definition that can translate the "why" of the deal into quantifiable objectives for integration and a specific plan(s) for every functional area, including revenue- and cost-related synergies. PMI should also consider the cultural fit of the acquiring and target companies as well as the nuances that can be inherent in each deal's particular circumstances (e.g. the target's industry vertical or business stage).

A key aspect to be focused on during PMI is ensuring that the CEOs of both companies devote the majority of their time to their core business and place a high priority on customer/stakeholder engagement. Hess suggests that to achieve this, employees must identify the problem solvers and thought leaders on the team of the target company and assign them to an integration taskforce. A trusted group of senior leaders on an M&A team for integration will help to reduce stress and increase morale/buy in by showing the acquired company that they care about their leadership.

While playbooks are not ideal for the fluctuating/irregular world of M&A, a basic framework and game plan can be helpful. To download a copy of the integration checklist, visit our free resources page.

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