Risks of Mergers and Acquisition Integration

A strong decision-making framework is needed to make decisions, coordinate work streams, and establish the foundation for an integrated business. This should be headed by a highly skilled person with an excellent management and process ability. Perhaps a rising star reising-finanz.de within the new organization or an executive from one of the acquired firms. Ideally, the person selected for this position should be able to dedicate 90 percent of their time to this task.

Insufficient communication and coordination could slow integration and prevent the merged entity from achieving quicker financial results. Financial markets are expecting an early and significant sign of value capture, and employees might see an inability to integrate as an indication of instability.

In the interim the core business has to remain the main focus. Many acquisitions can bring revenue synergies, which require coordination between business units. For instance, a well-established consumer products firm that was restricted to only a few distribution channels might merge with or buy a company using different channels to gain access to new customer segments.

A merger may also distract managers from their business by absorbing too much energy and attention. The company suffers. Additionally, a merger acquisition might not be able to solve the cultural issues that are an important factor in employee engagement. This can result in problems with retention of talent as well as the loss of key customers.

To avoid these risks, clearly articulate what financial and non-financial results are expected from the deal and when. To ensure that the integration taskforces are able to progress and meet their objectives on time it is crucial to assign these goals to each.