1) Mergers and acquisitions involve significant risks, regulatory challenges, and cultural differences that are deeper than initially perceived. 2) For mergers and acquisitions to succeed, human resources must be involved from the early due diligence process through integration to ensure effective communication and alignment of culture between the combining organizations. 3) Key human resources focuses in mergers and acquisitions include retaining key talent, developing organizational capabilities, managing cultural integration and resistance to change, and realigning compensation and benefits.

1. Creating HR Value in Mergers & Acquisition
From Ratnesh Kumar
M & A strategy has become a part of Business’ natural rhythm. The reasons to pursue an
acquisition are varied and most acquisitions have multiple rationales e.g Creating synergy
through enhanced capacity utilization, access to new technology and market, leveraging
economies of scale and scope, distribution channel and cost optimization. Acquisition is about
People, Strategy and Numbers…..not just numbers. M & A significantly increase risk, regulatory
and cultural challenges. The critical success factor hinges more on “ How to Integrate the
Acquired Companies Assets ( esp Non Tangible …People, Process and Practice) than “ What
to integrate”(Hard Assets….Plant, Machinery, Distribution channels).Further, cultural differences
appear to be more deeper than perceived. Retention of key people is one the most challenging
aspect. Research suggest that 40-45 % of the senior management of the acquired firm leave
within the first year of the deal.
Value Add HR services in Mergers and Acquisition
Getting to grips with a company merger or acquisition is one of the most challenging issues HR
professionals face. Understanding the employment law issues, and critical people issues such
as leadership, employee communications, talent retention and cultural alignment are vital for
success and can really make a difference to the long term merit of the deal. With the big to
medium ticket size M & A activities , it is imperative that HR specialists become involved in the
pre- merger and acquisition processes such as due diligence right through to the integration
process and post deal activities. People and communication are at the heart of successful
integration. Not surprisingly, organizations paying particular attention to HR Involvement during
“Due Diligence” and post integration perform better than those who consider HR as a mere
“recipient of deal”. The key focus areas for HR include retention of key talent, building
organization capability, cultural audit/integration, managing resistance, re structuring, re
deployment and alignment of compensation & benefits . Cultural difference especially being a
sticky issue need not be over played on the pretext of communication down load. Ultimately,

2. proof of every successful integration boils down to synergy between people, process and
practice.
HR Touch Points
While there are no “one size fits all ’’ yardstick on handling M & A, the common business
wisdom clearly advocates the following check list or the HR touch points in a run up
towards a successful business acquisition/merger.
 Understand the employment law framework surrounding mergers and acquisitions
 Learn how HR can make a difference in the pre merger or acquisition stages of the deal
and help lead the company throughout the transition process
 Hear practical guidance on how to build a common culture and identity
 Learn how to identify, motivate and retain talent during the transformation
 Hear best practice insight on how to develop the right reward strategy
 Understand the role of HR in a cross border transaction and gain practical advice on
managing the people issues and cultural barriers
 Realize the role of HR in unlocking the employee value in the deal
Pay off
The bottom line behind M & A is to create a sustainable business outcome measured by
creating ‘’synergetic value’. ‘The common indicators to measure the success of M & A may
include the following
• Shareholder Value
• Return on Capital Employed
• Market Share
• Employee Surveys

3. Investing in People (Integration of talent) is a game changer for any successful M & A.
HR should preserve its “People Balance sheet” to navigate through the complex world of
mergers & acquisition. Cross border M & A calls for global mindset….Do we have the
right capability …right people ?
HR input holds key into making Go-No Go decision. Simply put, HR really matters in
successful M & A.