Merger Acquisition Integration (PMI) Success Factors

An acquisition can be a powerful strategic tool for increasing market share, expanding capabilities, or leapfrogging competitors by using cost efficiency. Many acquirers fail to fully integrate their new entity into the existing business. This can result in long-term negative impacts. This article discusses the key success factors for merger acquisition integration (PMI) that can ensure a smooth and effective integration.

PMI should begin with a clear and concise definition that translates the «why» of the deal into quantifiable goals for integration and specific plan(s) for every functional area, including revenue- and cost-related synergies. PMI should also take into account the cultural compatibility between the acquiring and the company in question as well as the unique aspects to each deal’s unique circumstances.

A key aspect to be focused on during PMI is to ensure that the CEOs of both companies commit the majority of their time to their core businesses and prioritize customer/stakeholder engagement. Hess suggests that to accomplish this, employees should be able to identify the problem solvers and thought leaders on the team of the target company and assign them to an taskforce to integrate. Having these trusted, senior leaders in an M&A integration team can ease stress and improve morale/buy-in by showing the acquired company that their leadership cares.

While playbooks are not ideal for the fluctuating/irregular world of M&A, a basic framework and game plan can be helpful. Visit our resources page for free to download a copy of the integration checklist.