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PostMergerIntegration
Presentation by Faizan Khan Merger & Acquisition
TREYresearch
WhatIsit?
2
The process of two or more companies coming
together in the process of merger involves companies
...
TREYresearch
TypesofMerger
Integration
3
• Strategy- Developing a strategy that leverages
the competition of both firms an...
TREYresearch
4
• Capabilities- Integrating business
capabilities in order to reduce duplication of
effort.
• Processes- In...
TREYresearch
IssuesInvolvedInIntegration
Inadequate integration
• A lack of synchronization throughout the IT
infrastructu...
TREYresearch
Data amalgamation
• Data amalgamation makes certain that companies
have access to updated information across ...
TREYresearch
Cultural Challenges
• Mergers and acquisitions usually occur because
financial and business rationale add up,...
TREYresearch
RoleofHRMin
M&A
Integration
8
The success of a merger and acquisition depends on how
well an organization dea...
TREYresearch
TheHRcanhelptheemployeeinthefollowingways
9
• HR helps in managing interpersonal conflicts
and makes employee...
TREYresearch
IntegratingCrossBorderM&A
10
Integration of two companies from
different nations can be more difficult as
the...
TREYresearch
11
Strategies for Post-Merger Integration Success
TREYresearch
12
SET THE DIRECTION
1.Start by defining the basic objectives of the
integration.
2.Rigorously manage the int...
TREYresearch
13
BUILD THE ORGANIZATION
1. Design the future operating model early in the
process; it may differ from the d...
TREYresearch
Thank you
14
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Post merger integration

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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

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Post merger integration

  1. 1. PostMergerIntegration Presentation by Faizan Khan Merger & Acquisition
  2. 2. TREYresearch WhatIsit? 2 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.
  3. 3. TREYresearch TypesofMerger Integration 3 • 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.
  4. 4. TREYresearch 4 • 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.
  5. 5. TREYresearch 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 5
  6. 6. TREYresearch 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. 6
  7. 7. TREYresearch 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. 7
  8. 8. TREYresearch RoleofHRMin M&A Integration 8 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.
  9. 9. TREYresearch TheHRcanhelptheemployeeinthefollowingways 9 • 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.
  10. 10. TREYresearch IntegratingCrossBorderM&A 10 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.
  11. 11. TREYresearch 11 Strategies for Post-Merger Integration Success
  12. 12. TREYresearch 12 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.
  13. 13. TREYresearch 13 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.
  14. 14. TREYresearch Thank you 14
  • lauka150

    Apr. 15, 2021

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

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