Step 5: Develop M&A Integration 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 and all the careers that are involved. Also, reflect on how 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 avoid discussions about potential post-merger problems. 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. You should think ahead, identify major risks, determine their likelihood, and develop plans to eliminate or mitigate them.

In this section, the articles, tools, and presentations are designed to help acquirers assess the impact and probability of integration difficulties. And the slides from our Merger Integration Certification Workshop provide examples of mitigation strategies.

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Mayday The top 10 distress signals
How do you discern "normal" problems from dangerous signals?
How good are your really at Merger Integration
Managers tend to overestimate their integration skills.
FourCommonApproaches
Colorful descriptions of dysfunctional processes.
Can you identify the hot spot
Poor integration in this area can doom a deal.
Merger Integration Risk Analysis

A penetrating look at key pressure points that can threaten the integration process.