Asian Mergers and Acquisitions: Riding the Wave

CHAPTER SEVEN

A Guide to Successful Post-Merger Integration

A large percentage of mergers and acquisitions (M&A) fail because the post-merger integration (PMI) process is mishandled. Successful integrations are about speed, leadership, communication, risk, and cultural management. Establishing a proper PMI team, with three important building blocks—merger management, value capture, and merger enablement—is important. A central program management office with the backing of senior shareholders and management needs to manage and drive the merger. SWAT teams must be formed to identify and deliver the synergies that have been identified as part of the merger proposition, with the full involvement of the eventual business line managers. Finally, key enablers such as information technology (IT) and human resources (HR) need to be aligned to ensure the company has the right technology and capabilities to take it forward.

After the deal has been sealed, the hard work begins. Integrating two companies is difficult work. This is the make-or-break juncture, and the odds are stacked against success.

Few mergers create value. Our research shows that in Asia, only one-quarter of M&A deliver the expected benefits. Poor communication, unclear expectations, a muddled post-merger structure, lack of leadership, poor planning, and lack of momentum are often to blame (see Figure 7.1).

FIGURE 7.1 Problems Identified in Post-Merger Integration

Source: Global Merger Integration Survey; A.T. Kearney analysis. ...