Expert Analysis: Top Considerations for Cross Border M&A Integration

By GPMIP Partner Stefan Hofmeyer with contributions by the GPMIP Partner Team

As an interesting exercise I recently sent out a request to my fellow Global PMI Partners to see what they had to say about top considerations for cross border M&A integration. The rules were simple: (1) keep it concise and (2) do not duplicate what others have said. Here are the quick turnaround results that are invaluable to anyone in charge of a post merger integration:

Leave Your Glasses at Home

Manage your cross-border integration based on facts and leave your glasses at home. You will encounter a new set of business and operational truths that will require you to be agile in thinking and adoption– Determine what is best left as-is and what should be integrated. Be clear on governance from the start. This is where the target had freedom and now they need to adhere to acquirer policies. These are the people who will govern. This is the strategy and your objectives.
Michael Holm, GPMIP Partner, Sweden

Make Sure Day 1 Events Are Not Afterthoughts

Make sure Day 1 events don’t become “muted” afterthoughts at acquired cross border locations. Ideally, have an executive presence there to welcome people and carry the message so they feel they are as important as everyone else.
Scott Whitaker, GPMIP Partner, Atlanta

Align Deal and Operations Team, Check Culture, and Detail TSAs

During the due diligence phase, align the deal team with the operational team tasked with executing the integration. Compare your local and corporate culture with that of the target. Check the mutual cultural fit and identify pitfalls. Be very detailed and exhaustive in the creation of transition service agreements (TSA’s), and get rid of them as soon as possible.
Christophe Van Gampelaere, GPMIP Partner, Belgium

Address the Soft Elements

The most important area that frequently gets neglected is management of soft elements such as cultural differences, internal communication, employee morale, etc. Management teams typically don’t realize that disregarding these areas accelerates poor performance.
Eitan Grossbard, GPMIP Partner, Israel

Keep Focused on “The Why”

At the core of successful cross border M&A transactions is the strategic fit! The ‘WHY’ of doing the deal (e.g. closing the gap in the product portfolio, broadening geographical reach or acquiring intellectual property to speed up innovation) Ensuring the ‘WHY’ identified during strategic selection, analyzed during due diligence, built upon during integration planing and realized post closing is paramount. Don’t get distracted by obsessive list making, keep focused on what matters most – the 20% actions that drive 80% of the value. Don’t allow being overwhelmed to dilute your efforts. Keep pushing the ‘WHY’ until you reach success.
Thomas Kessler, GPMIP Partner, Germany

Don’t Forget Management Involvement

Do not assume that integrating organisations will happen without a strong involvement of your management.
Jean-Michel Hermage, GPMIP Partner, Luxembourg

Speed Matters!

Speed matters! Make sure you get your troops aligned and get them marching in the same direction – ideally fast. Uncertainty and confusion are your worst enemies as they will cause your good people to leave and dilute the expected synergies of your deal!
Michael Schiedel, GPMIP Partner, Denmark

Keep the Deal Rationale at the Front of Your Mind

Whether you made the acquisition because of growth opportunities, cost synergies, talent, product / IP, geographic expansion, defence or with another objective, clearly communicate this within the integration team and ensure that all integration plans and actions deliver that deal rationale.
Andrew Scola, GPMIP Partner, London

Assign a Leader Responsible for Making People Responsible

As for my own nugget of wisdom, the deal phase is an intense effort with clearly defined responsibilities. After signing, integration responsibilities are much more distributed. Assign a leader responsible for ensuring all aspects of the integration are owned and aligned to deal drivers– Clear responsibilities are a key component to M&A lifecycle success.

Don’t forget to sleep during those global deals everyone, and happy integrating.

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Sincerely,

Stefan Hofmeyer
Partner, GPMIP