This presentation explains what merger and acquisition is, How integration is important after merger and acquisition, how it is to be done, what can be the factors of failure, what is the role of an HR during integration and what strategies companies should follow for a successful Post Merger Integration

1. PostMergerIntegration
Presentation by Faizan Khan Merger & Acquisition

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WhatIsit?
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The process of two or more companies coming
together in the process of merger involves companies
Assets, Employees, Resources, Tasks, and the
Supporting information technology coming together
to make the merger a successful process. While the
merger might end with the documentation and legal
formalities the task which is to make sure that all the
resources, employees, tasks, supporting technology
synergies with each other successfully is Known as
post merger integration. It is a process which starts
after the merger happens but needs planning from
the very start of the merger process thus it can be
said that post merger integration starts even before
the merger is discussed.
For example:- Think of it as a marriage where two
families come together but it is not a simple task as it
requires planning from a very early stage of how to
make the family members accept each other however
the wedding is easy but the marriage as a whole
requires planning.

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TypesofMerger
Integration
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• Strategy- Developing a strategy that leverages
the competition of both firms and optimizes costs
• Products-In some cases, products are
integrated. For example, a robotics firm might acquire
an artificial intelligence firm in order to integrate their
software into products
• Structure- Combining organizational structures
such as two IT departments.
• Culture- Developing a common set of norms,
expectations, habits and values. Differences in
corporate culture can easily descend into
counterproductive office politics.

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• Capabilities- Integrating business
capabilities in order to reduce duplication of
effort.
• Processes- Integrating business
processes or choosing one process over
another. For example, establishing single
processes in areas such as human resources
and financial controls.
• Policy & Procedure- Consistent set
of rules and practices in areas such as human
resources or customer service.
• Systems- Integrating systems or
reducing duplication of systems.
• Data-Integrating data such as customer
and product data.
• Knowledge-Combining knowledge
assets such as content management systems
and key documents.

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IssuesInvolvedInIntegration
Inadequate integration
• A lack of synchronization throughout the IT
infrastructure can result in difficulties with
everyday business processes, producing
complications and slowing down overall
operations. In addition, without integration of
supporting and operational process applications
(e.g., HR, finance, CRM, ERP, sales, marketing)
within the entire organization, errors and
replications are inevitable. As both the acquired
and the acquiring organization come in with
separate financial systems, suppliers, partners,
etc., it is crucial to ensure a standard is
established.
Lack of visibility
• With two merging organizations in a similar
technology environment it is possible to have
duplicate client information. Additionally, unless
the two merged companies have established a
customer data integration system, procuring an
updated single view of the customer is essential.
For example, having two disparate
Salesforce.com enterprises can result in two
sales representatives contacting a single client,
portraying a disorganized picture of the
organization
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Data amalgamation
• Data amalgamation makes certain that companies
have access to updated information across the
entire organization regardless of whether it resides
on premise or in the cloud. Lacking an effective
data integration solution, retrieval of information
scattered across various systems, applications and
services is complicated.
Employee retention challenges
• Many mergers and acquisitions (M&As) deals
have retention issues, which result from
negative attitudes felt by employees. This can
include uncertainty about the future of the
organization's direction, job security,
perceptions of lack of leadership credibility
and feelings of confusion due to lack of
communication. In essence, employees often
lose trust in their organization and feel
betrayed by their leadership. During this
delicate process, it's essential to keep
employee turnover low because business
continuity is key to realizing the benefits of
the merger. there can be also large financial
implications from the cost of hiring new
employees. What's more, employee turnover
can result in loss of knowledge and customer
relationships.
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Cultural Challenges
• Mergers and acquisitions usually occur because
financial and business rationale add up, but fail to
realize the cultural implications that may occur.
Various studies conducted on the outcome of
M&A’s show that 30% of them fail within three
years, the majority due to the disparities in
organizational culture.
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RoleofHRMin
M&A
Integration
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The success of a merger and acquisition depends on how
well an organization deals with issues related to its
people and cultural integration. The HR department of an
organization acts as a strategic partner. So formulating
strategies while ignoring the employees can be a crucial
error for the organization. The role of HR becomes
strategic when it takes decisions about what kind of
people, capability, and commitment the company would
want the deal. To efficiently handle this phase many
companies undertake feasibility studies based on which
it decides what part of the workforce is to be retained.

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TheHRcanhelptheemployeeinthefollowingways
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• HR helps in managing interpersonal conflicts
and makes employees better team players. It
also helps them in dealing with cultural
differences. Clear communication content and
channels are customized to address cultural
differences.
• HR also deals effectively with the integration
issue. Effective employee communication acts
as a key here. Questions about job security,
relocation, changes in benefit programs and
new reporting relationships are answered by
the HR only. Keeping a check on rumors,
anxiety, resentment and the loss of top talent,
has also to be dealt with.
• The M&A phase is very sensitive to employees
as they feel insecure about their future in the
transitional times. HR in such a situation
makes people retain their faith in the
organization. The HR has to retain the
confidence of employees and assure them job
security.

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IntegratingCrossBorderM&A
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Integration of two companies from
different nations can be more difficult as
the gap between culture, government
policies, business regulations is much
higher, Companies need to work more
effectively to make the Integration
successful. The issues during the integration
can be same as cultural, communication and
regulation issues but the gape between the
issues when compared to integration of two
domestic companies can be wide.

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Strategies for Post-Merger Integration Success

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SET THE DIRECTION
1.Start by defining the basic objectives of the
integration.
2.Rigorously manage the integration as a discrete
program, independent of its size.
3.Organize integration teams around drivers of value
and the target operating model, and appoint leaders
from both companies.
4.Insist on senior leadership that is committed,
credible, and highly visible.
CAPTURE THE VALUE
1. Emphasize speed. Use the period before
closing to start designing the future company
and prepare to capture value.
2. Aggressively pursue synergies according to
the integration's objectives.
3. Keep the current business strong by involving
current customers in the integration process.
4. Decide on IT for the integrated company early
and explicitly.

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BUILD THE ORGANIZATION
1. Design the future operating model early in the
process; it may differ from the day-one structure.
2. Manage talent by selecting, retaining, and
developing the best people.
3. Rigorously manage cultural integration and
change management.
4. Communicate, communicate, communicate; it is
better to have too much communication than too
little.

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Thank you
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