Mergers & Acquisitions

Global Mergers and Acquisitions

Mergers and acquisitions are a primary growth strategy for companies domestically and worldwide. Although the decision to merge with or acquire another company is typically made by a small circle of top executives and specialists, the implementation of a major transaction requires effective collaboration of leaders and employees at all levels. We help guide clients towards successful integrations through recognizing and working through organizational and cultural differences.

Firms working on mergers or acquisitions commonly focus on immediate strategic & financial issues; these concerns shape the questions asked during the “due diligence” process:

What is the financial condition of our acquisition target?
How well do our product portfolios mesh?
How much overlap is there between our customers and theirs, and how will customers react?
Will we have new market opportunities?
What cost savings can we extract from the combined operations?

Cultural Diligence Is Often Lacking

While busily searching for information in response to such questions, M&A teams often underestimate or mishandle more subtle issues. There is increasing recognition that lack of cultural fit is the primary reason that mergers or acquisitions fail.

An estimated seventy percent of such cross-border M&A transactions either fail or underperform.

– “Perspectives on Merger Integration,” McKinsey & Company, June 2010.

When these deals are global, the cultural aspect is magnified for not only are organizational cultures mixing, but also national cultures. It is clear from our conversations with clients, backed by numerous studies, that the number one cause of failure among international mergers and acquisitions is employee integration: the human element. The effective collaboration among leaders and employees at all levels is often assumed or overestimated. Yet this is where the breakdown in global mergers and acquisitions most often occurs, catching senior executives off guard, and leading to prolonged and costly efforts to improve situations that could have been anticipated and avoided.

Expertise in Assessing Corporate and National Cultures

Aperian Global’s expertise in this area is to help companies strengthen their due diligence processes and consider questions that go beyond the usual financial and strategic concerns. Our cultural diligence process considers the following:

  • Is your merger integration team considering country and regional characteristics, infrastructure, human resources practices, and the differences in competitive environments?
  • Are you setting up planning teams that focus on operational and functional aspects of the combined entity?
  • Have you performed a stakeholder analysis that maps key employees critical to the deal valuation and future success (R&D, distribution, sales relationships, product development, etc)?
  • Does your integration plan fully account for the challenges related to national, organizational, and team cultures?

Ernest Gundling, co-author of Leading Across New Borders, explains important considerations when approaching a global acquisition or merger, including having a deep understanding of the specific markets involved.

Read our thoughts & latest news related to Mergers & Acquisitions
Newsletter Signup

Please enter you email to sign up for latest news & events.