Seven fundamental tenets of successful integration

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Delivering deal value is far from a mystery, even in today’s dynamic deal environment. The most experienced dealmakers say they know what to do—and are reporting success. But that success is getting harder to come by.

Research has shown that too many acquisitions fall short of expectations. Despite the best intentions, carefully developed strategy often does not translate into the right mix of people, process, and technology for integration.


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Seven fundamental tenets of successful integration

Seven fundamental tenets provide a successful framework for integration that have been tried and proven time and again, and allow managers to focus their effort on sound execution. These include:

  1. Accelerate the transition ®. There is no value in delay. It is critical to focus on obtaining bottom-line results as quickly as possible to maximize shareholder value.
  2. Define the integration strategy. Integration is a highly tactical effort. But the tactics must be implemented in ways that capture and protect the value of the deal.
  3. Focus on priority initiatives. Resource workload limitations demand that integration efforts be prioritized. And shareholder value must drive the allocation of resources for meeting those priorities.
  4. Prepare for day one. Critical day one tasks need to be determined early, before longer-term, more detailed planning commences. This allows for prompt identification of long lead-time items, well before they can turn into closing day surprises.
  5. Communicate with all stakeholders. Communicate early and often with all stakeholders, including customers, employees, investors, suppliers/ vendors, and the general public—providing information directed to their special concerns yet consistent in overall theme and tone.
  6. Establish leadership at all levels. Early and swift selection of key management posts for the transition is critical to minimize uncertainty, assign accountability, define functional authority, and clarify roles.
  7. Manage the integration as a business process. Mergers and acquisitions rarely fail due to a flawed strategy. Rather, missing targets and deal objectives are often a result of untimely execution of the strategy. Successful integration must happen quickly and systematically.

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Gregg Nahass

US and Global M&A Integration Leader, PwC US

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