acquisition integration meaning
The part of the merger process, following the closing of the merger agreement itself, in which the assets, personnel, and business activities of the two companies participating in the merger are combined. The post-merger integration may take between a few months to multiple years after the merger agreement is signed. Integration Capability (or not). Most firms have not made enough acquisitions to have been able to develop expertise with the integration process. Nonetheless, management teams of both companies owe it to their stakeholders to efficiently complete the acquisition or merger cultural integration. Definition of post-merger integration. The period that starts at the closing of a deal but which can last from a few months to a number of years. The post-merger integration is the time in an acquisition when all of the operations of the target company are absorbed into the buyer. Successful cultural integration of acquisitions or mergers are characterized by three fundamental factors: 1  The vision is established that identifies what the two merged companies will look like after the integration is completed. Integrating an acquisition successfully is not trivial and requires a rigorous effort to do it right. An integration that fails is like a tar baby that keeps coming back like a bad dream: It siphons resources, creates unnecessary distractions for management and hinders operating and financial performance. If the deal was structured as a merger, then this is the time when the operations of both legacy companies are combined. Example The post-merger integration should first be discussed before the deal is even announced. 1 In an acquisition, the roadmap should include that which the acquiring organization wants to keep from its culture and what it wants to integrate from the acquiring culture. 2  Define and Model Executive Authenticity under the Desired Culture. The Spanish banking group, Grupo Santander, is one of the companies that do post-merger integration consistently well in their acquisitions. They meet the target companies’ management to plan the integration even before the deal is announced, if possible, and more intensely soon after announcement. 1 Define the Level of Urgency and the Reason for the Culture Change. 2  For acquisitions, the urgency of the culture change should be assumed unless it is strictly for a buy and sell investment; however, the culture and its impact on the successful integration of the organizations is frequently ignored. For example, when they purchased UK-based Abbey National in November 2004, in a deal that had been announced in late July the same year, they embarked on an intensive 100 day post-merger integration plan focused on cutting costs: headcount reductions and a new, much tighter, cost management and procurement procedure.
The period that starts at the closing of a deal but which can last from a few months to a number of years. It is the time in an acquisition when all of the operations of the target company are absorbed into the buyer.