The Post-Merger Integration Plan

A strong post-merger integration plan contains two basic components: an integration charter outlining the high-level goals and parameters of the project, and step-by-step checklists detailing the individual tasks required to integrate different workstreams at the tactical level.

The charter outlines the nature of the integration, including its purpose, deliverables, success criteria, and budget. Additionally, the charter includes a list of the resources and personnel required for execution of the integration, establishes a preliminary timeline, and defines any end-state requirements. The charter should be created immediately upon selecting an individual target, and updated and refined as new information emerges. It falls to the integration team and any pertinent outside constituencies to continuously validate the charter and maintain alignment with the project goals.

According to the strategy outlined by the charter, relevant functional experts develop detailed step-by-step checklists, outlining the tactical approach to integration. The scope and amount of low-level work required during integration vary considerably, depending upon different strategic considerations, namely the level of integration to take place: are you partly integrating this company? Fully integrating? Or not integrating at all?

With countless possible integration configurations, the more time integration specialists have to consider the many variables governing their project, the stronger the post-merger integration plan.

Tips and Strategies:
The deal team is inherently cross-functional. The overwhelming majority of the tasks the team completes over the course of the project include component elements from multiple workstreams. Encouraging individual team members to deepen their understanding of the needs and duties of their colleagues empowers the team as a whole to carry out its duties more effectively.

“I have encouraged teams as part of a regular transaction to pick a domain and spend a little bit more time with that domain to understand their processes and how they work. I have asked multiple times for integration teams and integration managers to spend a period of time just leaning in. Like, ‘on this deal I want you to spend a little bit more time with the HR team to understand how we set compensation, how we set levels, how we set promotion cycles,’ so that they understand that world a little better and are more conscious of its needs. That way, if we are going to do something that is impactful we can raise it with them earlier and give that time team a little bit more lead time. You have to be an M&A ambassador to those teams and figure out how to work a thoughtful solution that still supports the deal but does not drive over some of the other teams.”
James Harris, Principle of Corporate Development Integration at Google

Preliminary planning for the transaction begins before the signing of the LOI. An acquiring company should clarify its assumptions about how and why the integration needs to occur, and justify the pursuit of the deal at the proposed valuation. When an LOI is signed with the chosen target company, the formal due diligence period begins. As diligence progresses, the deal team can use the information unveiled to continuously refine and add detail to the post-merger integration plan. The team should also look ahead to potential cultural issues, design customer and market strategies, and generally perform as much preparatory work as possible. When the deal is formally closed, the deal team can approach the integration stage prepared and well-informed.

Expert Opinions: “Our role starts during diligence. We are working and forming ideas, understanding the product, the customer market, etc. We use that [information] to determine what we are trying to do with this acquisition — what is the problem we are solving? What is the technology we are building, buying or integrating? We go through an iterative approach throughout the entire company from the front end, where we ask 'how are we going to sell it?', to the back end, where we ask 'how are we going to build it?' We are continually iterating on the integration plan as we find more information.”— Christina Amiry, Head of M&A Strategic Operations at Atlassian

The post-merger approach outlined above does not merely bridge the gap between the diligence and post-close integration stages of the M&A lifecycle but eliminates this rift entirely. Realistically, however, maintaining a dedicated integration team is only possible for large serial acquirers, due to cost. Occasional acquirers need to take a different approach.

In many cases, executing integration planning as a parallel workstream during due diligence confers many benefits, such as efficient knowledge-sharing and deeper domain understanding of the deal. Improved outcomes emerge from team members’ ability to convey lessons learned during due diligence across to the Integration team, which significantly accelerates the overall integration timeline and leads to significant reductions in cost and time spent.


Tips and Strategies:
Developing the overall integration plan needs to be an iterative process because, as more information is learned about the entities to be consolidated, new issues and opportunities may present themselves and the integration goals may need to adapt to the specific circumstances. As the goals change, more fact-gathering may be required to assess their feasibility and implications. With each iteration, however, the objectives of the integration and the best way to achieve those objectives should come more sharply into focus, producing a more detailed and refined plan.
Baker Mckenzie Post-Acquisition Integration Handbook

Key Takeaways:

Value Proposition: planning the project with multiple teams optimizes communication, and allows all team members to contribute to the development of the plan

How to put it in play:

  1. Invite interdependent teams to complete tasks
  2. Discuss task dependencies and key milestones, to ensure common understanding
  3. Create a plan in which all teams have a high degree of confidence

Anti-patterns to avoid:

  1. Focusing only on a single teams’ tasks
  2. Not sharing the plan with other teams
  3. Creating a plan with too many variables and/or external dependencies and unknowns