“Corporations are always faced with the problem of how to build key skills, or get control of the necessary assets to improve performance. They can do so organically and incrementally, or they can try to fill the gap quickly by merging with businesses that have most of what they need. Mergers, however, do not create value in and of themselves. Those who are dining out on the heroic moment when the deal is clinched should remember that the battle has only just begun. ” – Matt Bekier, McKinsey Regional PMM Practice Leader, Asia Pacific.
Success in mergers hinges on identifying and capturing the situation-specific sources of value. That value is not limited to the cost and revenue synergies that flow from the specific aspirations for which the merger/acquisition was undertaken. It also includes the value released from opportunities stemming from unfreezing and transforming the organization that can often dwarf cost synergy but that are much harder to achieve. Thus, full value capture is dependent upon rigorously applying an appropriate, tailored integration approach to deliver the strategic rationale of the merger.
Understanding which integration approach is appropriate requires not only deep understanding of merger management techniques but exposure to a wide enough sample of mergers to understand what works well when and where. McKinsey’s Post Merger Management Practice has played a significant role in 17 of the top 50 mergers globally in the past 5 years (1999 -2003) and has demonstrated depth and breadth of experience across all possible combinations of strategic rationale and integration approach.
McKinsey’s post merger management support can begin before the targets are selected and ranges from senior counseling to hands on support of the full range of integration activities. Senior counseling might consist of providing guidance to the Steering Committee, coaching the Client Integration Team in an onsite training workshop, or providing ongoing point-of-contact support. Hands on support can include:
