BB The 10 Steps To Successful M And A I
Tailor integration to identify value, keep the right people and focus on critical decisions
The 10 steps to successful
M&A integration
By Ted Rouse and Tory Frame
Ted Rouse is a partner with Bain & Company in Chicago and co-leader of Bain’s
Global M&A practice. Tory Frame is a partner in London and leader of London’s
Post-Merger Integration and Consumer Products practices.
Copyright © 2009 Bain & Company, Inc. All rights reserved.
Content: Editorial team
Layout: Global Design
The 10 steps to successful M&A integration
Tailor integration to identify value, keep the right people and focus on critical decisions
Despite these successes, many acquirers— perhaps most—leave huge amounts of value on the table in every deal. Companies continue to stumble in three broad areas of postmerger integration:
•
Missed targets. Companies fail to define clearly and succinctly the deal’s primary sources of value and its key risks, so they don’t set clear priorities for integration.
Some acquirers seem to expect the target company’s people to integrate themselves.
Others do have an integration program office, but they don’t get it up and running until the deal closes. Still others mismanage the transition to line management when the integration is supposedly complete, or fail to embed the synergy targets in the business unit’s budget. All these difficulties are likely to lead to missed targets— or an inability to determine whether the targets have been hit or not.
•
Loss of key people. Many companies wait too long to put new organizational structures and leadership in place; in the meantime, talented executives leave for greener pastures. Companies also may fail to address cultural matters—the “soft” issues that often determine how people feel about the new environment. Again, talented people drift away.
•
Poor performance in the base business. In some cases, integration soaks up too much energy and attention or simply drags on too long, distracting managers from the
core
The 10 steps to successful
M&A integration
By Ted Rouse and Tory Frame
Ted Rouse is a partner with Bain & Company in Chicago and co-leader of Bain’s
Global M&A practice. Tory Frame is a partner in London and leader of London’s
Post-Merger Integration and Consumer Products practices.
Copyright © 2009 Bain & Company, Inc. All rights reserved.
Content: Editorial team
Layout: Global Design
The 10 steps to successful M&A integration
Tailor integration to identify value, keep the right people and focus on critical decisions
Despite these successes, many acquirers— perhaps most—leave huge amounts of value on the table in every deal. Companies continue to stumble in three broad areas of postmerger integration:
•
Missed targets. Companies fail to define clearly and succinctly the deal’s primary sources of value and its key risks, so they don’t set clear priorities for integration.
Some acquirers seem to expect the target company’s people to integrate themselves.
Others do have an integration program office, but they don’t get it up and running until the deal closes. Still others mismanage the transition to line management when the integration is supposedly complete, or fail to embed the synergy targets in the business unit’s budget. All these difficulties are likely to lead to missed targets— or an inability to determine whether the targets have been hit or not.
•
Loss of key people. Many companies wait too long to put new organizational structures and leadership in place; in the meantime, talented executives leave for greener pastures. Companies also may fail to address cultural matters—the “soft” issues that often determine how people feel about the new environment. Again, talented people drift away.
•
Poor performance in the base business. In some cases, integration soaks up too much energy and attention or simply drags on too long, distracting managers from the
core