Risks of Mergers and Acquisition Integration

A strong decision-making framework is needed to make decisions, coordinate work streams, and establish the foundation for a unified company. This should be helmed by a highly skilled person with strong leadership and process skills. Perhaps a rising star within the new organization or a former executive from one of the acquired firms. Ideally, the person selected for this position should be able to devote 90% of their time https://reising-finanz.de/finanzversicherung/ to this task.

Insufficient communication and coordination can slow down the integration and deny the new entity of accelerating financial results. Financial markets are expecting the first signs of value capture, and employees may see delays in integration as an indication of instability.

In the meantime, the business of base must be kept in the forefront. Many acquisitions can bring revenue synergies that require coordination between business units. For instance, a reputable consumer products firm that was restricted to a few distribution channels could join forces with or buy a company using different channels to gain access to new customer segments.

Another risk is that a merger might soak up too much of the attention and energy of a business which can distract managers from their business. In the end, the company is harmed. A merger or acquisition could not address the cultural issues that are vital to employee engagement. This could lead to problems with retention of employees as well as the loss of customers who are important to you.

To avoid these risks you must clearly define what financial and non-financial goals are expected and by when. Then, delegate these goals to each of the taskforces involved in the integration process to ensure that they are able to achieve their goals and ensure that one company is integrated according to schedule.