FREE online courses on Mergers & Acquisitions - Chapter 6 - Managing the Process

 

The integration of two companies is managed within a single, centralized structure in order to reduce duplication and minimize confusion. A centralized structure is also needed to pull everything together since the integration process tends to create a lot of divergent forces. A Senior Project Team will be responsible for managing post merger integration (PMI). This includes things like coordination of projects, assigning task, providing support, etc. As previously indicated, it is important for both senior management and middle management to share in the integration process:

 

 

The Senior Project Team will consist of representatives from both companies, covering several functional areas (human resources, marketing, operations, finance, etc.). Team members should have a very strong understanding of the business since they are trying to capture synergy values throughout PMI.

 

Special task forces will be established by the Senior Project Team to integrate various functions (finance, information technology, human resources, etc.). Task forces are also used to address specific issues, such as customer retention, non-disruption of operations, retention of key personnel, etc. Task forces can create sub-teams to split an issue by geographic area, product line, etc.

 

All of these teams must have a clear understanding of the reasons behind the merger since it is everybody's job to capture synergies. There is no way senior management can fully identify all of the expected synergies from a merger and acquisition.

 

It is not unusual for some task forces to begin meeting before the merger is announced. If integration begins before announcement of the merger, team members will have to act in a confidential manner, exercising care on who they share information with. The best approach is to act as though a merger will not take place.

 

Example 17 - Timeline leading up to Post Merger Integration (PMI)

 

June 21, 1998: Officers from both companies plan post merger integration.

July 17, 1998: Orientation meeting for key management personnel from both companies.

July 30, 1998: Project Managers are assigned to Task Forces.

August 16, 1998: Launch Task Forces.

August 27, 1998: Critical Issues are identified by Task Forces. Set goals and time frames.

October 26, 1998: Task Force develops detail plan for PMI.

October 30, 1998: Reach consensus on final plan.

November 6, 1998: Officers from both companies approve detail integration plans.

November 11, 1998: Operating (action steps) are outlined for implementing the PMI Plan.

January 17, 1999: Begin Post Merger Integration

 

 

Example 18 - Outline for Post Merger Integration (PMI) by Senior Task Force or Senior Project Team

 

1. Assess current situation - where do we stand?
2. Collect information and identify critical issues for integration.
3. Develop plans to resolve critical issues.
4. Obtain consensus and agree on PMI Plan.
5. Train personnel, prepare for integration, work out logistics, map out the process, etc.
6. Implement PMI Plan - conduct meetings, setup teams, provide direction, make key decisions, etc.
7. Revise the PMI Plan - measure and monitor progress, make adjustments, issue progress reports to executive management, etc.
8. Delegate - Move the integration process down into lower levels of the organization, allow staff personnel to control certain integration decisions, etc.
9. Complete - Move aggressively into full integration, coordinate and communicate progress until integration is complete.