Mastering the Merger Four critical decisions that make or break the deal
Mastering the Merger
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Mastering the Merger

No deal ever works out exactly as planned. The most effective acquirers expect things to go wrong - although even they can't say just where the train will go off the rails - and they ready themselves to correct course. They set up mechanisms for diagnosing and remedying problems. They're prepared to intervene early and decisively when the unexpected occurs.

Post-deal problems generally fall into one of three categories:

  1. Problems that can be fixed through focused interventions. These issues tend to crop up around the margins - they're serious enough to demand attention but not in the deal-breaking realm. They don't undermine the investment thesis on which the deal was built. These manageable problems usually crop up in three areas: organizational issues, operational dysfunction and customer service blunders.
Del Monte and Heinz: Eliciting feedback
Newell and Rubbermaid: A transformation chronicled
BMW and Rover: Undoing a deal you can't fix
Checklist of early warnings

  • Problems that can be fixed only through transformations. These kinds of challenges may reflect faulty due diligence or may grow out of changing market conditions. The investment thesis still holds, in whole or in large part, but disruptions and difficulties have become all too visible and demand time-consuming treatment. Transformations don't involve a process of nipping and tucking around the edges; instead, they entail fundamental organizational overhaul.

  • Problems that can't be fixed. Sometimes, the only solution is to get out of the deal. Perhaps the investment thesis was wrong from the outset or external circumstances changed so radically that even the deepest intervention isn't going to help. The goal in such cases is to move expeditiously, humanely and decisively-that is, leaving no loose ends. Getting back on track is all about discipline - anticipating post-deal problems, setting up sensors to detect them and tackling them as soon as they emerge. Successful acquirers learn to distinguish between the deals that present the inevitable glitches and those that present more serious problems. They let go of the past, admit their errors and take tough, decisive action to put their deals back on track.


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