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press
coverage
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ACG
Network
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Volume
10 No. 4 November 1998 |
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the
art of m&a integration
By Alexandra Reed
Lajoux
Reviewed by ACG
member Hugh Latif & Associates
" In my years as an
executive involved in external growth through acquisition (both at A.C. Nielsen and Dun
& Bradstreet), and in my current work as a management consultant and independent
corporate director, I have come to believe that the real key to merger success lies in
what happens after the deal is closed."
Of course, a successful deal
must have a good strategy, a thorough due diligence and fair pricing, but unless the two
companies achieve post merger synergy, failure will result despite even the best
pre-merger planning efforts.
This same belief is the premise
of The Art of M&A Integration: A Guide To Merging Resources, Processes
and Responsibilities, written by Alexandra Lajoux, longtime editor of Director's
Monthly, the official newsletter of the National Association of Corporate Directors. This
book, published in early 1998 and headed for a third printing, is a comprehensive guide
for managers involved in the integration of two or more companies following merger or
acquisition. It is a "map" of most if not all the main issues and concerns that
can arise in a range of areas, including human, financial, management, compensation and
technological processes; and responsibilities to customers, suppliers shareholders,
lenders, employees and communities.
Art is written in
question and answer format. Here is a partial list of questions chosen form approximately
1,000 Q&A exchanges:
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What happens to the names of the two companies when they merge?
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What are the pros and cons to these different approaches?
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When two companies merge, should they merge their mission statements, and if
so, how?
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Assuming that two companies want to combine their pay systems, how
should they do this?
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What are the main barriers to success in merging R&D efforts?
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If the post-merger pricing will be lower will regulators consider
giving a merger an antitrust area?
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These are just my selection of
literally hundreds of questions that can become urgent after the merger unless they are
anticipated in advance.
In posing and answering these
questions, Dr. Lajoux has drawn upon considerable research as well as interviews with 50
experts, As one expert she interviewed, I can vouch for the care she took in creating and
checking the answers. Other the UK's Committee on the Financial Aspects of Corporate
Governance; Robert K. Mueller, former chairman of Arthur D. Little; and Nel Minow, a
prominent shareholder activist - to name just a few. These experts have provided practical
answers and down-to-earth how to's for dealing with M&A integration.
With companies' evaluations at
nearly an all-time high a practical checklist for post-merger integration is a
"must" reference book.
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