The CEO of Company A was looking to grow his business and decided to buy a competitor. The CEO’s rushed into planning how the two companies could come together but had different visions for success.
The deal was high profile and after signing they were under pressure to integrate quickly, they soon faced a number of problems. The Sales teams were struggling to adjust to each other’s cultures, the CFO was unclear how the synergies in the investment case would be delivered, and the Head of Risk was worried about disruption to business.
Even though the reason for the deal was consolidation, under all this pressure the CEO’s decided to leave Company B as a stand-alone business. A year later because they didn’t deal with the issues head on, Company A was facing challenges. Conflicts over customer accounts caused service levels to drop and clients went elsewhere, profits were down as synergy opportunities were delayed or lost and disruption to day to day business meant their new product launch was delayed. With so many problems employees started to leave.
As the economy picked up Company A decided to buy a new business to expand into new markets, learning from their previous experience, they took a more strategic approach to the integration, both leadership teams worked together on a strategy that aligned with their investment case. Synergy calculations were well thought through and supported by Management, they took culture seriously and communicated regularly. Employees felt included from day one and were happy. Management were proud they were on target to deliver the investment case. They had a positive response from the market, results were good and their new joint product launched on time.
Every deal is different and whether it is for consolidation, transformation or strategic growth, with the right approach and experienced people to support you, your deal will deliver long term value.