How merger integration thinking must shift
Merger integration focus should be on behavioral and process change, maybe even more than on synergies. Success requires the combined company to:
- Identify value-driving business behaviors
- Consider strategic operating model redesign before closing
- Consider modular integration
We recommend determining the different level of integration function by function. In many cases, it’s best to maintain a “loosely coupled” integration approach, which can allow for fast unwinding of a deal if this year’s brilliant deal becomes next year’s divestment.
As TMT companies move toward doing more convergence deals, the focus of merger integration may shift from operational synergies to talent or technology access and protection, or from revenue and income growth targets to innovation and technology maturity targets. Or, it may shift from full organizational and functional integration to reverse integration, adoption of the target’s cultural behaviors and separate evaluation of each function to determine the appropriate level of integration.
Success with M&A can mean discarding the old merger integration playbook when it comes to convergence deals.
Summary
M&A success in technology, media and telecom can mean discarding the old convergence-deal playbook.