Step 5: Develop M&A Risk Mitigation Strategies

Growth through M&A is a high-stakes game.

The element of risk adds to the drama, excitement, and overall appeal of the merger game. But as always, where there is much to be gained, there is precipitous downside risk as well.

Think about how much money is at stake. Then consider the number of people in the two companies ... all the careers that are involved ... the lives you’re playing with here. You might also reflect on how all the other stakeholders are watching intently—your customers, suppliers, bankers, the public who owns your stock. And, of course, the press may be hanging around just aching for a hot story about how things are going wrong. Your competition would love to make a field day out of this.

Obviously there is a lot on the line here. The next few months aren’t going to be a day at the beach. Making the deal was just a warm-up ... the real job is making it work.

M&A advisors working on contingencies tend to over-emphasize the upside of every deal. Unfortunately, one plus one sometimes equals less than two. Every merger will have some negative synergies such as turnover of key talent, sales losses, incompatible systems, productivity declines, turf battles, cultural friction, or something else. Rest assured, one or more gremlins will try to get you.

It is difficult to be over-prepared. Acquirers should think ahead, identify risks, determine their size and likelihood, and develop plans to eliminate or mitigate the major ones.

In this section, the tools and presentation are designed to help assess the impact and probability of operating and performance management difficulties. And the slides from our Merger Integration Certification Workshop provide examples of mitigation strategies.

Free Access

Articles

Most Dangerous Phase
The Most Dangerous Phase of Merger Integration
It's the Death Valley of integrations.
Top 10 Distress signals in Merger Integration
Mayday! Mayday! The Top 10 Distress Signals in Merger Integration
How do you discern "normal" problems from dangerous signals?
How good are you at Merger Integration
How Good Are You—Really—at Merger Integration?
Managers tend to overestimate their integration skills.

Tool

Merger Integration Risk Analysis
Merger Integration Risk Analysis
A penetrating look at key pressure points that can threaten the integration process.

Partial or Restricted Access

Videos

Webinar

What is #1 cause of Merger Failure
What's the #1 Cause of M&A Failures?
The answer is not cultural incompatibility.

Presentation

Tool

Merger Integration Risk Impact / Mitigation
M&A Integration Risk Impact/Mitigation Template
Example of completed risk identification and mitigation Excel template.

Articles

M&A Integration risks and challenges
Don't Get Cocky: M&A Integration Risks and Challenges
Ignore these M&A integration pitfalls at your own peril.
Four common approaches to M&A
Four Common Approaches to Merger Integration That You Should Avoid
Colorful descriptions of dysfunctional processes.
Remember the 20-50-30 rule
Dealing With Resistance to Change? Remember the "20-50-30 Rule."
Romancing the resisters holds little promise.
Man walk into a Bar
Man Walks Into a Bar . . .
Integrations almost always get messier when delayed.