Post-Merger Integration Framework

Companies spend their time pulling the deal off. They often don’t put enough focus on the most important part – the integration.

The integration is the key to value. If you do not get the companies integrated you will have paid too much

The goal of PMI is to get the reconfigured company back in the marketplace as quickly and effectively as possible -- doing business in the ways the deal envisioned.That goal faces two deadly enemies: uncertainty and an excess of process and governance. The former is unavoidable, and the latter is usually self-inflicted.

Left unchecked, they will drain value from the deal. The good news is that both can be overcome with the same weapon: a lean, flexible, adaptive approach to identifying and resolving key operating decisions at the earliest possible moment. Timely decisions fuel every PMI activity. Tackle them aggressively and you will dramatically improve the odds that an M&A deal will deliver the anticipated shareholder value.

Key elements of the Post-Merger Integration ramework

  • Structure, Resources, Process & Tools
  • Integration of Corporate Functions
  • Transition to Line Responsibility
  • Review and Learning

Integration Business Drivers To Get It Right!

  • “There will be hunters and hunted, winners and losers. What counts in global competition is the right strategy and success!” …….. Heinrich von Pierer
  • Post-Acquisition Integration:
    • the phase, where the operations of the acquired entity are merged with the Buyer’s existing operations
    • the phase where the results of the Buyers M&A strategy, and expectations for the closed deal, materialize
  • Guiding principles for acquisition integration “Quick Win Synergies NOT captured in the first 12 months, usually evaporate and are overshadowed by day-today business”
  • Key Guiding principles for successful post acquisition integration Strategy
    • Get the Integration Strategy Right
    • Design the integration program around Program Design the benefit realisation Program
    • Provide focus via outstanding program Management
    • Manage the Risk to the business as Risk Management well as the program People
    • Rapidly engage the people in both Communication organisations
  • Integration Implementation Structure 3 years
    • Cultural change
    • Optimum Benefit 12 to 18 months Realisation
    • Changes are implemented First 100 days
    • Quick wins are realised
    • “Takeover Period” • decisions are made Day 1 and priorities set
    • First day after Change • organizational of Ownership structure to be finalized


The First Day after Change of Ownership

  1. Communication
    • Welcome letter of individual emails
    • New Managers
    • How to contact and FAQs
  2. Operating Management
    • What continues as before
    • What changes immediately
    • What near-term changes are expected and when
    • Where more information can be found
  3. Systems and Controls
    • Continuation of Financial & Review Reporting
    • Clear instructions, ready forms and templates and time-table
    • Temporary Management Systems & Controls if Operational Structures are not finalised

Operating Structures, Systems & Controls

  1. Appointment of a Managing Director
    • Early, should be part of the Acquisition Process or Day 1
    • If MD is from acquired entity, the Acquirer should nominate their own CFO/Controller for smooth Financial Integration
  2. Decision on Key Managers
    • Key Managers should not be lost before or after integration
    • If not met with all the key managers prior to Day, use 100 days to decide
  3. Agree Operating & Statutory Structures
    • Top Level Structure is decided by Acquirers Leadership
    • Operating – Many times Operating Structure is Project Owner / Steering Group
    • Statutory – If the Acquirer has an entity in the same country, legal merger to be considered
  4. Governance & Guidelines
    • Similar type of governance to the Acquirer’s entity
    • Dos and Don’ts
      • New hiring & redundancies, Salaries & Benefits
      • Approval of Costs
      • Reports (Travels, Visits etc.)
      • Investments & Funding Agree on Governance & Agree on Office Authorising Guidelines and Locations Officers
  5. Agree on Authorising Officers
    • Who can approve documents – sales orders, purchase orders, employment contracts etc.
    • Delegations and approval limits
  6. Agree on Office and Locations
    • Consider possibility to physically consolidate locations
      • Estimate an renovations, moving, selling, buying of old premises as part of the study

FIRST 100 DAYS – Integration Period Approach

  1. Typical Target Benefit Realisation:

  • 20%-30% of Total Benefits
  • Realise Quick Wins
  1. Verify Due Diligence Data:

  • Gather Additional Information
  • Change/create Plan, Implement
  1. Setup Integration Team/s to Target all Key Corporate Functions & Business Areas Integration

  2. Invest in Integration

Having or not having key full time Integration Resources within Teams would mean success or failure of an Integration Project. It should not be „Business As Usual‟

  1. Top Management Alignment – Joint Meetings

Everyone in management of the acquirer and acquired entities is to be committed to the same goals and communicates the same message.

Discuss and agree on issues in series of meetings including:

  • The Separate Companies‟ Pre-deal Strategies
  • Choices to be made
  • Technology Trends
  • Future Strategy
  • Company Values
  • Value Creation Potentials
  • Costs And Risks
  • Company Goals
  • Size And Structure Of Entity To Fulfil The Strategy
  • Integration Goals
  • Process and Resources
  1. Integration Budget

First estimates of integration costs should have been identified during the transaction / purchase phase.

Integration Manager / team needs to review and refine these estimates to cover at least the following…

  • Basic ICT infrastructure changes
  • Changes in company identity / branding
  • Legal and other costs to ensure compliance with local laws and the Acquirer’s standards
  • Costs to introduce Acquirer’s risk management / insurance policies
  • Costs related to management changes (search fees, redundancy costs)
  • Integration Consultants/Advisor Costs (if applicable)
  • Travel / Accommodation for the Team during the integration period
  • Any other significant project-specific items need to be budgeted for.

Resources & Responsibilities

Integration owner / Manager

As in the transaction/purchase phase, the owner/sponsor is normally a member of the Acquirer’s Management team.

The owner of the integration phase can be the same individual as in the transaction/purchase phase.

Integration Manager

The Integration Manager is the project manager. This role should be appointed already during transaction / purchase phase.

As the reality on the ground, at the local market level, may well differ from the global view, it should be decided whether a local Integration Manager (reporting to the global Integration Manager) needs to be appointed to work more closely with a particular market or country operation.


  • Main responsibility for day-to-day management of the integration effort
  • Integration management work is hard to perform as a part-time activity, so the Buyers management needs to carefully consider the importance of the task and allocate the time necessary
  • Always made a “project assignment” with limited duration (typically from 3 months up to 18 months)


  • During Due Diligence, to become acquainted with the Targets business
  • Preparation and modification of the integration plan
  • Work with team, HR and communications in order to get a positive start of integration
  • Defining goals, resources and timetables for the integration project
  • Bringing integration teams together
  • Planning and running the kick-off meeting & follow-up meetings
  • Guide and support the integration teams
  • Coach and assist in problem solving
  • Reporting and defining instructions and goals to/from the Integration Steering Group • Monitor that the teams meet expectations in the given allotted (SPEED!)
  • Make sure non-negotiable issues are understood and implemented
  • Help personnel adjust to change
  • Assist in identifying and reducing cultural barriers
  • Ensure the tools and information sharing between the teams
  • Develop learning methods
  • Prepare reporting and reviews
  • Hold summary discussions

Integration Steering Group

The Integration Steering Group is the governing board of the integration phase

Role / Members:

  • Supervises the Integration Project Manager’s and the integration team’s work
  • Should meet at least monthly
  • Representatives from both Acquirer’s and the Target entity
  • May include individuals with specific expertise relevant to the project
  • Normally 3-7 individuals to maximize the effectiveness of team work


  • Selects the members of the Integration team (based on Integration Project Manager’s proposal)
  • Specifies the measures, goals/targets and reporting instructions for the Integration team
  • Supervises and supports the Integration teams work
  • Makes decisions on the more significant issues
  • Monitors the project costs vs. budget and approves the expenses incurred by the integration teams

Integration Stream Team Manager:

The members of the core team, often the same as the team / stream managers, are responsible for identifying the issues to be addressed and developing the integration plan.

Best results can be achieved when team members are experienced individuals from the Acquirer and the Target entity. In the case of integrating support functions (HR, ICT, finance and legal), it is recommended to recruit members who have previous experience of integration projects.

The key Integration team manager tasks

  • Being the team builder
  • Introducing the team members to one another
  • Seeing that the team members have all information/tools needed for the task
  • Clarifying the goals/targets/times tables/reporting etc.
  • Ensuring everyone in the team understands the goals the same way and is committed
  • Manage and encourage team to progress
  • Sees that the team keeps the schedules and prepares reports
  • Being the source of assistance and guidance, when needed

Market / country integration


When integration covers multiple countries, it is important to clarify which global guidelines, rules and tasks can be applied at the local level, and where country-specific exceptions need to be made.


  • Level of integration – retain separate legal entities or merge
  • Ordering, invoicing etc., to be made under which company name.

Coach / facilitator

If the Buyer has limited integration experience or none, an integration coach can be appointed to assist the Integration Steering Group and/or Integration Manager. The coach or a meeting facilitator can also be useful in the kick-off meeting and when considering specific team issues, like HR






















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