Real-World PMI: Learning from Company Experiences

Related Expertise: Post-Merger Integration

Real-World PMI

Learning from Company Experiences

By Lionel AréChris BarrettMarcus BokkerinkNiamh DawsonDaniel FriedmanPeter GoldsbroughBarry JonesMatt KrentzMark LubkemanHubertus MeineckeStefan Rasch, and Peter Strüven

Despite the economic downturn and ongoing financial uncertainties, about one-third of European companies expect to make an acquisition in 2009, according to a recent BCG survey.1 Notes: 1 See M&A: Down but Not Out: A Survey of European Companies’ Merger and Acquisition Plans for 2009, BCG White Paper, December 2008. This is not surprising. As previous BCG research has demonstrated, downturn deals tend to generate significantly higher returns than transactions executed in periods of above-average economic growth.2 Notes: 2 See Winning Through Mergers in Lean Times: The Hidden Power of Mergers and Acquisitions in Periods of Below-Average Economic Growth, BCG report, July 2003. However, the big difference in today’s environment is that investors expect returns to be delivered much more rapidly, making postmerger integration (PMI) more critical than ever before.

In our previous three Focus reports on PMI, we discussed the key ingredients for success—including the need to handle the integration from a strategic, rather than a mechanical, perspective and to think laterally when integrating different functions. This report, the fourth in our series, brings many of these points to life using real-world examples of companies that have successfully risen to the challenges of a PMI. Our goal is not to provide a comprehensive picture of the integration issues that acquirers face, but to offer insight into the realities of PMI and, in particular, the importance of approaching each integration with an open, creative mind. Rigorous processes are essential, but it is the strategic thinking and planning, while treating each PMI individually, that ultimately determine whether a PMI will deliver maximum value rapidly.

We focus on how nine companies met the critical PMI challenges of safeguarding the golden goose, uniting different cultures, overcoming organizational obstacles, putting customers in the driver’s seat, managing complexity, optimizing intellectual capital, and building PMI capabilities for future deals.

Real-World PMI