Chapter 6 - Postclosing integration: mergers, acquisitions, and business alliances

Abstract

The integration phase is an important contributor to the ultimate success of the merger or acquisition, and ineffective integration is commonly given as one of the primary reasons mergers and acquisitions sometimes fail to meet expectations. This chapter outlines a practical process for realizing successful integration, how the acquirer determines the degree of integration necessary to achieve their objectives, and how to identify ways to effect change without widespread disruption of operations. The critical success factors include careful premerger planning, candid and continuous communication, adopting the right pace for combining the businesses, performance tracking metrics, appointing an integration manager and team with clearly defined goals and lines of authority, and making the difficult decisions early in the process. This chapter also includes a discussion of how deal terms impact the extent of postmerger integration and how to overcome some of the unique obstacles encountered in integrating family-owned businesses and business alliances.