Post-Merger Integration (PMI) refers to the process of integrating two different organizations into a single organization following a merger or acquisition. As such, the process of integration would involve various organizational entities like:

  • People
  • Resources
  • Tasks
  • Supporting Information Technology
  • R&D
  • Synergies
  • Finance and Control
  • Legal
  • Communication
  • Sales and Marketing
  • Supply Chain
  • Production

In any merger or acquisition, the post-merger integration will be the most challenging task as this would often create both winner and loser at every level of a corporate sector. This task is difficult and political!

Questions Presented by Post-Merger Integration:

Following every merger, the management will be under strict pressure for addressing the challenges like:

  • Strategic integration priorities
  • Identifying synergies
  • Cultural change
  • Controlling business risk

Thus, the PMI would present the organization with the following questions:

  • How to ensure that the organization is incorporating the significant success factors for integration?
  • What are the functions that need to be integrated immediately?
  • How to concentrate on realizing synergies?
  • How to integrate the differing cultures?
  • How to retain the key talents?
  • How to keep workers concentrated on businesses as well as customers?

Outcome of a Poor Post-Merger Integration:

The losses that are suffered by mergers and acquisitions are not actually due to the poor match but to the poor PMI. This could result in employee disengagement which could even lead to the disintegration of the particular organization. In order to make a successful post-merger integration process, it is important to follow the essential steps that are listed below …

Approaching Post-Merger Integration:

Are you wondering how to approach the post-merger integration? Here are the steps of PMI excellence:

  • Cultural Due Diligence
  • Involvement and Engagement
  • Shared Vision
  • Analysis
  • Action
  • Implementation
  • Maintenance
  • Renewal
  • Integrated Organization

Paving the Road to PMI Excellence:

In order to understand the process of a successful post-merger integration, it is important to distinguish between different stages and to identify the essential components of them. Here is the road to PMI excellence:

  • Pre-merger Process: This would target the companies that could be a good match having the compatible values. This will be the starting point of integration via collective planning. This process would enable the merging companies to proceed towards the ‘Culture of Engagement’.
  • Merger Process: This process would enable the ‘Shared Vision’ which can be possessed at each and every level of the organization. This would be formulated for supporting and defining where the newly evolved company is proceeding and would set the foundation for ‘New Identity’.
  • Post-Merger Process: In this stage, time and human resources will be the essence of integration process. And the process would reinforce competencies thereby building a momentum and implementing a consolidation method. Thus, the ‘New Identity’ would become reality.

Additional Tips for Successful PMI:

Here are the tips for a successful integration:

  • Following the money
  • Tailoring the actions per the nature of deal
  • Resolving power as well as people issues more quickly
  • Starting the integration when the deal is announced
  • Handpicking the leaders for integration team
  • Committing to single culture
  • Winning of hearts
  • Maintaining momentum in the core business of merging companies
  • Investing to come up with an integration model
  • Closely monitoring the performance