Factors within the acquired company (continued) 

  • Private company vs. public company

While integrating a public company carries some delays in planning and integrating, a private company does not have these restrictions.
  • Low need for restructuring during merger integration

Merger integration is a huge change management challenge. Why not add some more change like restructuring? maybe not a good idea.
  • Low need for EbIT improvement

Same as for restructuring.

Factors between acquiring and acquired company

  • Similarity of organizations

the more similar organizations are, the less change will be anticipated and employees tend to find a new home and comfort more quickly. but there is a caveat: more similarity might also mean more overlap and redundancy between organizations.
  • Similarity of business models

the more similar business models are, the better the operations of these business models can be integrated. For software companies, this means easier integration in development and support but also in administrative functions. Look for similiarities by listing/modeling the business models of target and acquirer.
  • Connectivity of operations, production, business models, customer base, partner base

If there is a direct connection possible between business models etc. a merger makes sense. An example is the connection between an ecosystem of limo drivers of Uber with the transportation ecosystem of another company, because they can easily leverage one another. A special case is a horizontal merger, where companies with a connection of production are merged.
  • Similarity of operations models

How a business operates is a key thing to understand and to integrate a business. the closer an operational model is, the easier it is to integrate. You may use operations maturity models to determine the current and desired state of target and acquirer operations.

  • horizontal or vertical merger (but not a heterogeneous merger)

tbd

Factors in the business case for the merger

  • realistic synergy expectations

In practice, synergies may not come true or may come late or may not come at all! So be realistic in your synergy expectations. Why not start with a likelihood of 50% to reach expectations? It gets you some comfort and buffer. You would still shoot for 100% of synergies, but realistically you will never reach it as planned.

Environmental factors

  • approvals from regulation authorities are available

This is a simple go/no go decision by authorities. But it is important to get the approvals before you get too much involved in post merger integration.

Learn more at the workshop ....

 

(C) Dr. Karl Popp 2016