“Going global” is one of the key focuses for many companies nowadays. Accordingly, cross-border mergers and acquisitions (M&A) has been on the rise, and the trend is expected to continue. Considering post‐merger integration (PMI) plans during the M&A process is as important as considering purchase pricing and financial risks.
PMI encompasses everything from financial reporting integration, which includes the integration of the accounting system and internal controls, to cultural integration. Every organization has its own culture – the set of norms, values, and assumptions that govern how people act and interact every day. Needless to say, the cultural difference would be much larger when the target company is in a different country.
Laying out a specific implementation plan for PMI is a crucial piece of the M&A’s success. There have been instances where a failure of PMI has resulted in losing key employees from conflicting culture, weakening the merged company’s strengths. For successful integration, it is key to set a realistic time frame and implement it accordingly.
Have you thought about how to implement a succession plan? Have you thought about the realistic time frame to make the integration go smoothly from Day 1? Hiring outside consultants to assist with the PMI can significantly ease the burden and shorten the transition period.