Integration of Acquired Companies.ppt

Integration: Mergers, Acquisitions, and Business Alliances
What could be worse than being
without sight? Being born with sight
and no vision.
—Helen Keller
Current Learning Objectives
Primary learning objectives: To provide students with knowledge of (Several studies – 70 to 90% fail)
Factors critical to essfully integrating businesses,
Post-merger integration planning, and
Key activities that make-up the integration process
Secondary learning objectives: To provide students with knowledge of
Post-merger anizations
How to munication plans
How to create a anization
How to develop staffing plans, and
Integrating corporate cultures
Factors Affecting essful Integration
The pace of integration – deal specific
Integration planning- ASAP-simulate
munication- early & often
Customer focus- time the “culling”
Making the tough decisions early- rumors
Focusing on the highest leverage issues
Lessons ?-AOL, Upjohn, Kraft, Google¹
¹ See Google/Motorola Folder, When Google Met Moto, WSJ, August 17, 2011
Viewing Integration as a Process
Integration planning – nothing to chance
munication plans –to all
Creating a anization-
Developing staffing plans- redundancies
Functional integration- (A/R A/P P/R)
Integrating corporate cultures – huge?
Reason for deal should dictate. How so?
Best Buy & Geek Squad, EMC VMware¹- Maybe no
Is integration always the answer? Chrysler & Daimler
¹ See website, The New M&A Playbook, HBR, Christensen, March 2011
Chrysler & Daimler
1998 $36B deal
Auto deal - classic resource acquisition
1988-1998 – Chrysler modularized, outsourced leaving assembly to Chrysler.
Cut design cycle to < 2 years from 5 years
Design cost 20% of Daimler. + mkt. share 1% ↑
Daimler – synergies, $8 B redundant costs
Integration -speedy process/lean profits ↓ Killed
Better to not have integrated
Kraft & Google
Kraft ¹
Intended to integrate US and foreign business. Objective: Growth (merged) and e(original)?
Spinoff – two units
Euro, developing markets, snacks & confec