The post-merger integration is a dicey angle of Merger and Acquisition (M&A). It is a long and critical process of combining and rearranging participant companies in order to maximize potential efficiencies.
The Post – Merger Integration or M&A Integration Process should be handled carefully because realizing the maximum potential of the merger poses complicated challenges as every merger is unique. Otherwise, it would fail and the company would have to bear a huge loss of money, resources, goodwill and trust of bidders.
Successful integration is the key to avoid the risks involved in M&A. In order to mitigate the risk, the Post – Merger Integration Process should go smoothly without any breakdown. Here are the steps and solutions for successful M&A.
Post- Merger Integration Plan – a Step – by – Step – Agenda
Step 1: Direction setup
It is the design of overall post-merger integration defining objectives and principles. explaining the Post – Merger Integration Plan and selecting Post- Merger Integration Teams.
Step 2: Value construction
This is the stage where cost and revenue synergies are identified. Cost and revenue goals are to be established. Customer transition planning is to be done.
Step 3: Organizational change management
Plan the organizational restructure the integration structure, divide integration activities into functional areas like Manufacturing, Human Resources, Legal, sales Finance and IT. Prepare a communication strategy. Plan culture transition.
M&A Integrated Solutions
Following are some of the steps that help to make the integration more manageable:
- Start M&A Integration Planning as soon as the deal is announced or even before the deal announcement. Define the Post- Merger IntegrationActivities, pre-close considerations and requirements clearly. Make major decisions ahead of time. Make sure you evaluate goals throughout the integration process so that you do not lose focus on the primary business goal and provide a big picture view to everyone.
- Set Success Factors. Every M&A deal is associated with unique business needs, different operational benefits and challenges. Companies should have established success factors to work in the right direction. Such success points are maintaining customer focus, integrating cultures, emphasizing internal communication, retention and aligning strategy etc. It will help to handle most of the differences between the two companies.
- Link Due Diligence to Post-Merger Integration in order to avoid wastage of resources. It is necessary to connect two processes and prioritize to resolve critical issues only.
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