post-merger integration challenge

Post-Merger Integration Is Critical to the Value of a Deal

One of the biggest misperceptions about post-merger integration is that it can simply be tacked on to existing day-to-day responsibilities. That’s wishful thinking—and a recipe for unrealized value. BCG’s framework for a successful PMI has helped clients capture 9% more value from their M&A deals.

More often than not, M&A deals destroy value; more than half of mergers and acquisitions fail or underperform. While the transactions still go through, they never unlock their full potential. That’s because the challenge of PMI—bringing together two organizations, each with its own processes, structure, culture, and management—is profoundly complex.

To succeed, a PMI must achieve four fundamentally different objectives:

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Maintain momentum in the ongoing businesses.

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Maximize and accelerate synergies and value creation.

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Build the organization and align the cultures to drive the new company forward.

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Use the combined capabilities to advance the company’s competitive position.

In short, PMI is one of the most challenging initiatives that a senior executive will ever undertake.

Our Framework for Post-Merger Integration Success

In the past five years, we’ve helped major multinational companies complete more than 550 mergers and acquisitions. These M&A deals generated 9% more value for our clients, on average, than the average deal, in large part because of our PMI consulting services.

We help our clients succeed by combining deep industry and business strategy knowledge with comprehensive value delivery capabilities and expertise, thus accelerating and maximizing value creation throughout the deal and the PMI process.

Because no two PMIs are alike, it's hard to develop a formula. But BCG has articulated 12 imperatives for success in a three-phase approach: setting the direction, capturing the value, and building the organization. In the first phase, defining your basic objectives is essential. In the second phase, speed is crucial. And in the final phase, continuous communication ties everything together.

Beyond these imperatives, we support clients by leveraging our proprietary toolkit to help with the hundreds of decisions they face during an integration. We employ these tools to manage the complexity and ensure that every integration captures its intended value:

  • Our synergy database benchmarks data from hundreds of PMI projects to estimate and validate potential synergies.
  • Synergy Builder by BCG supports in defining potential synergies, setting top-down targets for each, and developing a detailed plan for their implementation.
  • OrgBuilder by BCG helps companies manage complex changes to their organization design through an interactive tool.
  • Our day-one PMI checklist provides a comprehensive list of priorities by function to ensure business continuity throughout the integration.
  • Our culture survey compares behaviors across both entities up front to reduce risk and increase the speed of the integration.
  • Hub by BCG tracks, consolidates, and coordinates the many integration workstreams and activities—an essential tool for the integration management office.
  • Key by BCG provides unparalleled transparency on synergy realization, potential implementation risks, and decision needs.

Finally, BCG doesn’t just help integrate a deal--we also set up our clients for success on their own by providing them with deep knowledge about the PMI process. Our integration academy, a multiday workshop led by our PMI experts, is a hands-on master class that builds on a rich repository of examples and is tailored to address the challenges and objectives of each integration.

Our Client Work on Post-Merger Integration by Industry

PMIs are often treated as a one-size-fits-all process, yet each has its own speed, style, focus, and rhythm. The PMI strategy and process must be tailored to account for those differences. Here are a few examples of BCG’s post-merger integration consulting work with clients on their post-merger integrations:

Meet BCG’s Post-Merger Integration Leadership Team

Learn More About Post-Merger Integration

How to Shape an Organization's Culture

How to Shape an Organization's Culture

How to Shape an Organization's Culture

Establishing Synergy Targets

Establishing Synergy Targets

Managing Talent and Culture During a Post-Merger Integration

Managing Talent and Culture During a Post-Merger Integration

The Key Elements of a Successful Post-Merger Integration

The Key Elements of a Successful Post-Merger Integration

Achieving Cost and Revenue Synergies During PMI

Achieving Cost and Revenue Synergies During PMI

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