Merger Acquisition Integration (PMI) Success Factors

Merger Acquisition Integration (PMI) Success Factors

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Strategic acquisitions can be a viable way to increase market share, improve capabilities, or beat competitors by making use of cost-efficiency. However, many acquirers fall short on fully integrating their new entities into the business and could result in negative long-term consequences. This article shares critical elements of success for merger acquisition integration (PMI) that can ensure a successful and efficient integration.

PMI should begin with a concise and precise definition that translates “why” the deal is in to quantifiable goals and plans for each functional area. This includes cost- and revenue related synergies. PMI should also take into consideration the cultural compatibility between the acquiring and target companies as well as the nuances inherent in each deal’s particular context.

In PMI an important focus is on ensuring that both CEOs prioritize customer/stakeholder involvement and dedicate the majority of their time to their core businesses. To accomplish this, Hess recommends identifying the people who are thought leaders and problem solvers on the target company’s team – the ones that employees turn to for assistance and assigning them to an task force on integration. Having these trusted, senior leaders in an M&A team for integration can help reduce stress and increase morale/buy in by showing the acquired company that their leadership cares.

While playbooks are not ideal for the fluctuating/irregular world of M&A, a basic framework and game plan can be helpful. To download a free copy of the integration checklist, visit our resources page for free.