Articles on M&A

Some 200 years ago, Jane Austen–one of Britain’s best-loved authors—wrote a famous novel about marrying. And money. Deep down that’s actually what mergers are about, too, so I thought to myself, “Maybe her classic, Pride and Prejudice, has parallels for merger integration.” ...
 

When an acquisition will be integrated and its current corporate identity reshaped, the parent (or surviving) firm has an obligation to bring acquired employees into the fold. This calls for comprehensive, sustained onboarding ...

Organizations have a hard enough time hanging on to good talent these days. Careers have become more a collection of assignments than a collection of seniority pins and gold watches. Work has come to be seen as more an activity than a place …
 

Mergers always require you to make sacrifices. It’s a time of tradeoffs. Compromises. Less than perfect solutions. So far as the people issues are concerned, it’s like watching a card game—some win, some lose, some break even ...

This is the most traditional approach, and it is good so far as it goes. Certainly, it does pay respect to salient—even critical—data. But good numbers can mask weak talent …

Traditionally the merger due diligence process has focused on legal and financial issues—e.g., contractual matters, litigation points, economic and fiscal considerations, etc. Obviously that’s an important exercise.

But when mergers fail, as they too frequently do, the odds are it reflects a sloppy job ...

Here’s how the familiar story unfolds…

Company A acquires/merges with Company B.  Part of the logic driving the deal is that, in combining the two firms, headcount can be reduced.  Accounting runs the numbers and promises annual payroll savings of, let’s say, $20 million.

But, of course, you can’t afford to let all those people go immediately … 

Frankly, almost all of us are amateurs at job hunting. If we find ourselves needing to make a career move, we may pick up a book about job search and start cramming. We might check out a couple of websites for advice on resumes or how to interview. 

Of course, most people just feel their way along until they land a job offer. And they make a lot of rookie mistakes ...

Job status notification is a difficult challenge that warrants careful planning and handling. Avoid the following typical mistakes when communicating job status information following the close of the deal: …                       
 

First, the new owner should not be tempted to “go with the familiar person.” This tactic does not sufficiently minimize the risks involved.

Second, there is real danger in deciding to “Do nothing and wait for the dust to settle.” ...

In a merger, acquisition, or takeover, reductions may be required immediately after the announcement of the transaction, or they may be required after work is transitioned from a department. In either case, you should prepare for the following necessary actions: ...
 

1.    Evaluate and, if necessary, refine the business strategy. Strategy should drive structure. Strategy should provide fact-based, clear, compelling, boundary-setting answers to these questions: …
 

One of the most likely bailout points is in the top management ranks …
 

One unfortunate reality of mergers and acquisitions is that good people sometimes leave…on both sides of the deal. Whether it’s a trickle or a flood, all managers on both sides need to pay attention …
 

As a hiring manager, you may have participated in the interview process when hiring externally at ACQUIRER or TARGET. The staffing of NEWCO will be somewhat different from what you’ve experienced previously …
 

The trust level drops dramatically when major changes are made in an acquired company post-sale. Morale heads south. Loyalty, the tie that binds, comes unraveled. Job stress hits new highs ... 

The top management in the acquirer might argue that it is best to allow some time to get to know the abilities and potentials of the management team in the target organization ...

Acquiring and merging a company is like hiring en masse. You spend a ton of money on the deal, and your payroll immediately explodes because of this huge new batch of employees ...

A reduction in force due to an acquisition creates a climate of heightened concern. Even those who are unscathed remain uneasy about the eventual ramifications and wait for the next shoe to fall.

After the downsizing is complete, you can safely assume that some employees still feel threatened and disempowered. These feelings can demoralize them and interfere with the success of your integration. How can you motivate the remaining people to stick with the company and make the merger work if you don’t have extra cash to incent them?