This document discusses best practices for post-merger integration. It notes that 60% of acquisitions destroy value and winning acquirers implement the right M&A strategy, especially for cross-border deals. It recommends moving quickly, establishing decision-making frameworks, ensuring integration budgets, addressing culture and communication, creating 100- and 360-day integration timelines, prioritizing high-value initiatives, and focusing on cultural integration through cross-functional teams. Communication breakdown is expensive, so the document stresses the importance of transparent storytelling and addressing employee concerns from career impacts.

1. +
Post Merger Integration
Winning Strategy for:
Post Merger Integration
Gnostam Consulting

2. +
It’s Like this…..
 Acquirers destroy value of acquired company in 60% of
acquisitions undertaken, [Academic data, Wharton School];
 BUT: Winning acquirers put right M&A strategy in place,
especially in cross border acquisitions.

3. +
Help!

4. +
Best Practices
 Move Quickly: Change is expected!
 Establish Strategic Framework for Decision Making: Articulate what is NON NEGOTIABLE
 ƒRESOURCES: Ensure budget exists for Integration
 ƒ CULTURE: Identify resistance in organization
 COMMUNICATE: Formalize communication through steering committee, communication plan
 ACTION: Formulate a 100 and 360 day Integration, with detailed time line
 MEASURE: Performance Versus Benchmarks
 PRIORITIZE: Make recommendations to Steering Committee for any changes of priority
 FOCUS: On high NPV with high probability of success, [Decision Trees]

5. +
Basics

6. +
ARTICULATE INDUSTRIAL LOGIC

7. + EXAMPLE OR TIME LINE USED IN PEPSICO

8. +
DO NOT SILO!!!

9. +
Do it Right, in Right Language
Steering Committee
Sales,
Cross
Functions
Product
Develop
ment
Finance Operations Quality
IT, Back
office
Integration

10. + RESOURCES
Acquiree Acquiror Co.
Overlap area:
This group has highest
Capabilities;
Empowered for change;
Drive Accountability
through steering committee;
Supported by external
Advisers.
Tax
External
Advisors
These groups focused on day
to day jobs
Legal
HR, Other, benefits IT integration

11. +
Cultural Considerations
 Cultural considerations are 80%
of reason integration fails. Must
commit to cultural integration at
highest level of organization;
 Cultural integration involves all
areas: it is not a one time. It is
complex because building trust
in organizations that are
undergoing change is very time
consuming and complex;
 Can only be done in teams
including both managements;
 Take time to explain,
communicate, train, educate,
both ways! Be transparent.
Culture re-inforcers:
1. Develop clear policies;
2. Goals… Measure them!
3. Recognize achievements;
4. Invest in staff, selection of staff;
5. Invest in training;
6. Create dedicated events;
7. Reward leadership, conflict resolution
8. Emphasis on communication
9. Improve physical environment
10. Reorganize continuously.

12. +
COMMUNICATION BREAKDOWN
 Avoid it! It is very expensive. Shareholders pay for it!
 FOCUS ON TELLING A STORY. Be accountable.
 Target personnel may have been highly disappointed in past,
career progression blocked….
 Introduce broad strategic goals, then focus on implications for
functional areas;
 Impact of integration is often burn-out of most talented staff!

13. +
EXECUTION
Also depends
Critically on type of
Acquisition…
Raid more risky, than
Co-operative situation:
see Acq Posture below.
 Acquisition Postures
Rescue Collaboration
Contested
Situation
Raid
Cooperative Adversarial

14. + LEGAL
 Earn-out formula’s, clawbacks…. The hard stuff..
 Revenues, gross margins, not EBITDA.
 Time frame, months not years…
 Post closing tax effects.
 Incentivize decoupling from “bridge systems”;
 Penalties for delays.
 Sign by close of deal;
 Incentives, stock options, bonuses, relocations, role
change, departures from company.
Definitive
Agreement
Transition
Services
Employment
Agreements

15. + Bio & Contact
 Philip has 30+ years of consulting
M&A experience with PWC, IBM,
various investment banks, and with his
own firm Gnostam since 2004;
 30 + years of global cross border due
diligence merger integration;
 Cultural integrations and fluency in 5
languages;
 Industries, Finance, Insurance,
healthcare, Maritime, Energy, IT and
Data Mining.
 pcorsano@gmail.com
 Tel +1 206 384 0069
Education: BSc Economics University of
Bristol
MBA London Business School
Decision Sciences Stanford
Marine Captain, 1600 Tons
Oceans