Completing an M&A transaction involves several activities and hurdles that need to be overcome. These hurdles include, for example, legal aspects, adjustments to the initial offering values (working capital), and reciprocal agreements. The transaction requires significant energy in coordinating different teams. due diligence, valuation and complexity of the negotiation. Once all the steps involved have been completed and the transaction is finalized, a no less laborious stage begins: the integration of the acquired company into a new dimension of its business operations. For this integration to be successful, the correct methodology must be applied. Post-merger integration (PMI) to plan and coordinate the next steps after the acquisition.

Most M&A transactions fail to meet expectations set out in the acquisition process. (Harvard Business Review, 2016, 2020). An overly optimistic projection of the future performance of both companies, competition in acquisitions driving up the acquisition price, or synergies that fail to materialize are all significant causes of frustrated expectations. However, much of the frustration with expectations is related to PMI poorly done, or "not done at all." In other words, poor planning and operational execution of the new merger could jeopardize its success.

Yes, integration planning and its excellent execution are essential to achieving a new reality for two companies that now operate together. However, an essential factor for the success of the PMI is the link between the strategic rationale for acquisition and the modus operandi which is established in the PMI. This means that the acquisition plan, with all its strategic rationale, must be implemented in a coordinated manner via planning and executed across the work fronts with structured and constant communication of the steps of the PMI.

Other factors are also crucial to successful integration, such as assessment and change management planning. After all, two cultures interact to achieve common results. We'll discuss this further in another post.

Today, I write to highlight the importance between the link of the strategic acquisition plan and the PMI to obtain the expected results. There are many factors and processes to generate this link. Link Strategy knows this path.