Mergers and Acquisitions: managing a merger-acquisition operation

The number of mergers and acquisitions has never been so high. Nokia-Alcatel-Lucent, Heinz-Kraft, Shell-BG… The trend is confirmed for the year 2015, since the latest Ernst & Young barometer carried out in April 2015 indicates that 58% of the leaders questioned in the world planned to carry out an acquisition during the year. But how to make a successful merger and acquisition using transition management ?

Tip #1: surround yourself with the right partners

A merger-acquisition is a tremendous lever for development … You still need to know how it works! It is important to know how to surround yourself with the right professionals.

With a large budget, you can choose between:

• Investment banks: they are the ones who advise large groups. Their high-level teams guarantee a global and quality service, from upstream thinking to downstream management.
• Chartered accountant companies: very popular with SMEs, these companies have expertise in auditing which proves to be invaluable in the context of a merger and acquisition.
• Law firms: they play a key role throughout the project, which goes from the audit to the structuring, passing through the negotiations and finally the final execution.

With a standard budget, you can turn to:

• “Traditional” banks: their knowledge of the local economic fabric and the possibility of obtaining equity participation make them excellent partners for SMEs.
• Institutions: the Chambers of Trades and Chambers of Commerce are able to provide advice on successful mergers and acquisitions in their regions, but their services are sometimes unequal.
• Independent companies: sometimes made up of one and the same person, they are an interesting option. Check their references carefully before you start.

Tip #2: Establish the team in charge of managing technical integration

Technical integration is an operation that takes between 3 and 6 months, and which requires a solid team. Merging two companies requires harmonizing a number of tools and processes. This ranges from the legal structure itself to the governance of the new entity, including the collective agreements in force.

Tip 3: Determine a provisional timetable for the transaction

It may seem obvious, but timing is also a critical factor in the success of an M&A . Changing the corporate culture is intimately linked to people, and generally takes between 12 and 18 months. There is no point in being in a hurry!

Tip #4: Promote your business

A successful merger-acquisition is based on a good asset assessment, accompanied by an assessment by comparison and a financial assessment. For VSEs/SMEs, it is also important to demonstrate the company’s financial and financial autonomy in relation to its manager.

Tip #5: Communicate internally and with partners and customers

Communication is there to help the ecosystem of each of the two companies to plan for the future by overcoming the transition period which can be destabilizing.
Externally, it is essential to demonstrate the success of the approach. Tracing the origins of the project and illustrating the success of each stage helps to give credibility to the speech of the new company.
Internally, it’s time to be pedagogical, and to take the time to explain the reasons behind the merger-acquisition. Often a reconciliation can generate concerns in terms of employment, careers, etc.

Finally, interim management is a key factor in the success of a merger-acquisition . Indeed, transition managers experienced in the management of mergers and acquisitions can accompany you to carry out this complex project.