August 26, 2014

Considering a merger? Why you have to think about company culture

Is your company considering the prospect of a merger or acquisition deal? If so, there are many factors that should be weighed carefully before deciding to move ahead.

If faced with this decision or planning an acquisition strategy, one of the key aspects to consider is whether the company cultures will be a match. Every company has its own unique culture, which plays an integral role in the way that it operates. When merging two companies together, failing to adequately account for this factor may spoil an otherwise seemingly workable deal.

If the people you are merging don't mesh, the effects could be damaging. According to a report by Mergermarket and The Storytellers, 60 percent of senior executives surveyed said that the most common reason for a merger or acquisition deal not being successful was that the employees and culture were not integrated, according to an article from CNBC.

The article refers to the idea of integrating people and culture as one of the key parts to creating a successful merger. In addition to improper integration making the process less smooth, it was also found that it led to a negative effect on share prices. To avoid the possibility of an unsuccessful integration, it is advised that employees must be able to "emotionally buy-in" to the new company in advance.

If you've been thinking about an M&A deal, have you considered what the integration will be like? If you have not thought about this important step, it will be worth doing so before deciding to move forward. With the expert counsel from an M&A advisor, your company will be equipped to make the most beneficial decision.