[Whitepaper] Considering M&A? Here Are 3 Critical Pre-merger Considerations

10/19/2019 Considering M&A? Here Are 3 Critical Pre-merger Considerations | flevy.com/blog
flevy.com/blog/considering-ma-here-are-3-critical-pre-merger-considerations/ 1/13
evyblog
Flevy Blog is an online business magazine
covering Business Strategies, Business
Theories, & Business Stories.
MANAGEMENT &LEADERSHIP STRATEGY,MARKETING,SALES OPERATIONS&SUPPLYCHAIN ORGANIZATION&CHANGE IT/MIS Other
Considering M&A? Here Are 3 Critical Pre-merger
Considerations
Contributed by Mark Bridges on September 16, 2019 in Organization, Change, & HR, Strategy, Marketing, & Sales
Post-merger Integration
Training
131-slide PowerPoint presentation
Post Acquisition Integration
Strategy (Post Merger
Integration - PMI)
79-page PDF document
Post Merger Integration (PMI)
Best Practice Framework
Change Management in Post-
merger Integration (PMI)
Takeovers can turnaround companies in a short period of time, but there is a significant degree of risk to be anticipated and mitigated prior to
undertaking such transactions. Lack of careful deliberation of the potential risks, insufficient planning, weak execution, and lack of focus on
Post-merger Integration are the major reasons why many Merger & Acquisition deals fail to achieve their desired goals.
The course of an M&A transaction has to be set at an early stage, way before the actual deal closure. The period prior to the deal approval by
the regulatory authorities and while due diligence is being done is most critical, and should be utilized by the leadership to clearly define the
goals of integration, the potential risks, and a layout for the execution of the actual integration process. It is the right time to perform a
structured evaluation of 3 core pre-merger considerations associated with such deals, i.e.:

1. Strategic Objectives
2. Organization & Culture
3. Takeover Approach

Understanding these PMI Pre-merger considerations helps the stakeholders ascertain the unique challenges and constraints related to M&A
transactions and make informed decisions. These considerations assist in developing a systematic approach to undertaking a Post-merger
Integration (PMI)—which is devoid of any “gut decisions,” and ensures realization of synergies and value. These considerations set the
direction and pace of the post-merger integration process.
Now, let’s discuss the 3 core considerations in detail.
Strategic Objectives
Organizations undertake Mergers and Acquisitions as a way to accelerate their growth rather than growing organically. The foremost core
consideration associated with an M&A transaction is the strategic objectives that the organizational leadership wants to achieve out of it.
M&A deals take place to fulfill one or more of these 5 strategic objectives:
Reinforcement of a segment
Extension in new geographies
Expansion of product range
Acquisition of new capabilities
Venturing into a new domain
The PMI approach needs to be tailored in accordance with the desired strategic objectives of the deal.
Organization & Culture
The senior management should be mindful of the significance of organizational and cultural differences in the two organizations that often
become barriers to M&A deals. Small companies, typically, have an entrepreneurial outlook and culture where there aren’t any formal
structure and the owner controls (and relays) all the information and decision making. Whereas, large corporations typically have formal
structures and well-defined procedures.
A takeover of a small firm by a large entity is bound to stir criticism and disagreement. M&A process often faces long delays between the
offer, deal signing, and closing—due to antitrust reviews or management’s indecisiveness— triggering suspicion among people. This should be
mitigated during the PMI process by orienting the people of the small firm with the new culture and giving them time to transition effectively.
For M&A deals to be effective, leadership needs to carefully evaluate the behavioral elements of the organizational culture and contemplate
the overriding principles guiding a company.

Takeover Approach
Integrating the operations of two companies proves to be a much more difficult task in practice than it seems theoretically. Organizations
have the option of selecting the takeover approach most suitable for them from the following 4 methodologies–based on their organizational
structures, people, management, processes, and culture:
1. Direct Hit
2. Hiatus
3. Deferred Decisions
4. Quick and Unsympathetic Disposal
Interesting in learning more about the takeover approach and the pre-merger considerations in detail? You can download an editable
PowerPoint on Post-merger Integration: Pre-merger Considerations here on the Flevy documents marketplace.
Are you a Management Consultant?
You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.
Readers Are Also Interested in These Resources
Post-merger Integration
Training
Post Acquisition Integration
Strategy (Post Merger
Integration - PMI)
79-page PDF document
Post Merger Integration (PMI)
Best Practice Framework
Change Management in Post-
merger Integration (PMI)
Post-merger Integration (PMI):
IT Integration Framework
Post-merger Integration (PMI):
Specialized Issues

Post to Facebook
Add to LinkedIn
Post to Twitter
About Mark Bridges
Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering
management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune
100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice
methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of
Business at the University of Chicago. You can connect with Mark on LinkedIn here.
View all posts by Mark Bridges →

5 Ways Collective Intelligence Helps Build Smart Teams
1 comment • 8 months ago
Avatar
Ritesh Patil — Mobisoft Infotech is Houston based smartphone
application development company specialize in iOS, Android and
BB Enterprise app development and our portfolio comprise of
The Best Data Solutions for Your Business
1 comment • 3 years ago
Avatar
BlueMule55 — Is there some reason why you "followed" me?
Industrial Engineer’s Silver Lining
Avatar
Keerthi — Industrial Engineer are great as they make better holes;
not perfecting drill bit.
4 Ways to Improve Customer Communication
Avatar
24Task — Your blog is really a well-explained piece of information
about Hire Virtual Assistant. Working with 24Task a virtual
assistant can completely change the way that you – and your
ALSO ON FLEVY BLOG
0 Comments Flevy Blog Login1
t Tweet f Share Sort by Best
LOG IN WITH
OR SIGN UP WITH DISQUS
Name
Start the discussion…
?
Be the first to comment.
Subscribe✉ Add Disqus to your siteAdd DisqusAddd Disqus' Privacy PolicyPrivacy PolicyPrivacy🔒
Recommend

FEATURED DOCUMENTS
ITIL Event Management Process
ITIL v3 Event Management Process is a part of ITIL v3 Service Operation publication. This Document contains detailed description of the ITIL v3 Event Management Process, including: - Key
definitions - Purpose and Objectives - Scope - Value [Read More]
ITIL Lifecycle Poster (ITIL v3-2011)
1-page PDF document
ITIL v3 - 2011 Lifecycle Poster - printable in A1, A2, A3 Poster describes ITIL Lifecycle model: Service Strategy, Service Design, Service Transition, Service Operation and Continual Service
Improvement. Poster includes all ITIL [Read More]
POPULAR DOCUMENTS ON FLEVY
Digital Transformation Strategy
ITIL 4 Poster (ITIL 4 - 2019, ITIL 4 SVS) - New
2-page PDF document
Project Quality Management v1
Business Case Development Framework

Commercial Due Diligence (CDD)
1000+ Consulting Diagrams, Templates, Graphics & Icons
Complete Guide to Value Creation
Explication detaillee des Bonnes Pratiques Maintenance
Business Process Master List (BPML) Template
Excel workbook
875+ High Impact Presentation Templates
POPULAR ARTICLES

14 Principles of Lean Toyota Production System (TPS)
Editor's Note: Charles Intrieri is a consultant with over 25 years of experience in Operational Excellence, Supply Chain & Logistics, and Metrics-driven Ma...
7 Steps to Produce a Strategy-on-a-Page (SoaP)
Every year you are asked to assess the previous year’s business performance and update your strategies to meet the needs of a changing environment, includi...
4 Effective Ways to Manage Resources More Efficiently
All workplaces are an integration of numerous departments working together as one to ensure the business runs smoothly. Almost every sector is reliant on o...
Taking Innovative Steps to Problem Solving: The Flexons Approach
Do you find problem solving so mind breaking? That when we crack our heads to find solutions, we often end up with the same solution all over again? As Alb...
Real Estate 101: Developing an Integrated Real Estate Strategy
Disruption is constantly changing the retail business environment. In fact, it is adding complexities to it with every passing day. Sweeping changes in c...
Managing Performance by Leveraging the Organizational Health Index (OHI)
The typical approach to improving productivity focuses on assessing variance in quality, time, rate, service, or cost, around which management systems deve...

COMPLIMENTARY BUSINESS TRAINING GUIDES
What is Business Strategy without How can we anticipate & manage
Embed View on Twitter
Tweets by @flevydocs
1h
18h
[Free PPT] 100+ slides of business diagrams/templates/visuals flevy.com/powerpoint-too…
Free #PPT plugin for #consulting diagrams - e.g. #Gantt charts, Booz balls, waterfall
flevy.com/powerpoint-plu…
Root Cause Analysis - 60-slide deck flevy.com/browse/tweet/d… #RCA
Flevy.com
@flevydocs
Flevy.com
@flevydocs
Free PowerPoint Plugin - Flevy Tools
flevy.com
Flevy.com
@flevydocs

proper Execution?
Many companies develop robust strategies, but
struggle with operationalizing their strategies into
implementable steps. This presentation from flevy
introduces 12 powerful business frameworks
spanning both Strategy Development and Strategy
Execution. [Learn more]
BIG Organizational Change?
This 48-page whitepaper, authored by consultancy
Envisioning, provides the frameworks, tools, and
insights needed to manage serious Change—
under the backdrop of the business lifecycle. These
lifecycle stages are each marked by distinct
attributes, challenges, and behaviors. [Learn more]
Want to save hours on your future
presentations?
We've developed a very comprehensive collection
of Strategy & Transformation PowerPoint templates
for you to use in your own business presentations,
spanning topics from Growth Strategy to Brand
Development to Innovation to Customer
Experience to Strategic Management. [Learn more]
Do you work in Operational
Excellence or Lean Six Sigma?
We have compiled a collection of 10 Lean Six
Sigma templates (Excel) and Operational
Excellence guides (PowerPoint) by a multitude of
LSS experts. These tools cover topics including 8
Disciplines (8D), 5 Why's, 7 Wastes, Value Stream
Mapping (VSM), and DMAIC. [Learn more]
RECENT ARTICLES BY CORPORATE FUNCTION
MANAGEMENT &
LEADERSHIP
Finding Corporate
Philanthropy a Challenge? Let
This Primer Guide You
How to Achieve GREATER
VALUE in M&A? Do the
Fundamentals of Post-merger
Integration
OK, the Merger's Done. How
Do We Secure the Promised
Revenue Synergies?
Why PLUS Decision Making
Model is Essential to Ethical
STRATEGY,
MARKETING, SALES
In this Digital Age, Are You
Ready for Digital Reinvention?
OK, the Merger's Done. How
Do We Secure the Promised
Revenue Synergies?
'Tis the Season for Strategic
Planning! Here’s What You
Need to Know to Successfully
Formulate and Execute Your
Strategy
Considering M&A? Here Are 3
Critical Pre-merger
OPERATIONS &
SUPPLY CHAIN
Integration
Conducting PMI? Here Are the
Critical 8 Decision Levers to
Evaluate
Taking Your Facilitation to the
Next Level: Master the 12
Workshop Facilitation
Techniques
ORGANIZATION,
CHANGE, HR
In this Digital Age, Are You
Ready for Digital Reinvention?
Finding Corporate
Philanthropy a Challenge? Let
This Primer Guide You
Integration
When Sustaining Stakeholder
Interest Is Essential: The
Importance of Corporate
INFORMATION
TECHNOLOGY
Why Knowledge Management
Strategy Is Important for
Business Sustainability
Understanding Enterprise
Architecture: Is it Really
Important Today?
Knowledge Management 101:
A Practical Guide for
Beginners and Practitioners
Retail Strategy: How to
Effectively Manage IT Costs
CORPORATE
COMMUNICATIONS
When Sustaining Stakeholder
Interest Is Essential: The
Importance of Corporate
Social Responsibility (CSR)
Sources of Value
You're Building a Customer-
centric Organization, So
Where's the Customer
Department?
What's the Best Way to
Manage and Communicate
with Virtual Teams?

About Flevy.com / Terms / Privacy Policy
Organizations
Conducting PMI? Here Are the
Critical 8 Decision Levers to
Evaluate
Considerations
Scenario Planning : A
Workshop Consulting
Approach When the Future
Needs to be Different
When Business Change
Needs to Take the Upper
Hand: Take the Lean-led
Business Transformation
Getting Ready for Enterprise
Asset Management (EAM)
Implementation
Social Responsibility (CSR)
Sources of Value
Why PLUS Decision Making
Model is Essential to Ethical
Organizations
The Principles and
Implementation of Scaled
Agile Framework (SAFe)
Can Business Communication
Be Thought of As a Science?
4 Ways to Improve Customer
Communication
The Flevy Business Blog (http://flevy.com/blog) is a leading source of information on business strategies, business
theories, and business stories. Most articles have been contributed for management consultants and industry executives
with over 20 years of experience. If you would like to contribute an article, please email our editor David Tang at
dave@flevy.com.
Flevy (http://flevy.com) is the marketplace for premium business documents, such as management frameworks, presentation
templates, and financial models. Our documents are of the same caliber produced by top tier consulting firms, like McKinsey,
Bain, Accenture, BCG, and Deloitte. Learn more about Flevy here.
Connect with Flevy:
© 2019. Flevy LLC. All Rights Reserved.

[Whitepaper] Considering M&A? Here Are 3 Critical Pre-merger Considerations

Recommended

Recommended

More Related Content

More from Flevy.com Best Practices

More from Flevy.com Best Practices (20)

Recently uploaded

Recently uploaded (14)

[Whitepaper] Considering M&A? Here Are 3 Critical Pre-merger Considerations