Mergers and Acquisitions

The Lifecycle


To achieve a successful merger or acquisition, business leaders must address a range of issues strategic, operational, financial, cultural in an integrated way throughout all phases of the deal. The M&A lifecycle model represents key M&A activities which must be addressed, beginning with the strategic consideration of a deal through the post-merger integration and operation of the new, merged entity.

 
 

Overview

The Merger or Acquisition (M&A) Lifecycle framework focuses executives' attention on all key issues that must be addressed in each phase, not solely those involved in getting the deal done. In this way, the needs of important constituencies such as owners and other stakeholders, customers, employees, suppliers, and regulators are more likely to be met, and the merger or acquisition to achieve its intended value.

While successfully navigating each phase of the lifecycle is vital, the "first 100 days" immediately following deal announcement are truly a critical time period for post-merger integration efforts. Often the success or failure of the entire merger or acquisition rests on the leadership, accountability and key decisions of those initial critical weeks. Having a decisive plan for these first 100 days, and for the key decisions and activities which must be accomplished during this timeframe, goes a long way toward increasing odds of success.

Manage Deal

This phase involves oversight and program management for pre-deal and deal structuring.
- Communicate to key constituencies
- Manage the strategic review and target analysis efforts
- Manage the deal team and advisors
- Track data and documents, issues and overall logistics

  • Develop Strategy
    An organisation evaluating mergers or acquisitions as growth options establishes its position.
    • Develop corporate strategies
    • Identify and assess M&A options
    • Develop acquisition rationale and intent
    • Agree on acquisition strategy

  • Analyse Target
    The organisation assesses potential targets.
    • Determine acquisition criteria
    • Screen and prioritise candidates
    • Prepare preliminary deal shapes
    • Select target(s)
    • Agree on an initial target approach strategy

  • Structure Deal
    The acquirer approaches the target and begins, and hopefully concludes, the acquisition.
    • Form the deal team
    • Conduct due diligence
    • Prepare bid tactics and strategy
    • Finalise the deal shape
    • Prepare offer documents
    • Approve the bid
    • Conduct final negotiations and bid conclusion
    • Begin mobilisation activities (such as appointing integration director, and preparing initial public relations plan and deal announcement)

Manage Transition

This phase occurs throughout the post-merger integration effort.
- Initiate an overall program management structure
- Develop an approach to risk and issue management
- Oversee legal and regulatory approval
- Manage the business case
- Develop and implement a readiness program
- Monitor performance and stability

  • Mobilise Effort
    The organisation establishes the methods and resources required to communicate the deal and conduct the integration.
    • Identify organisation and integration team leadership
    • Make initial strategic decisions
    • Build the integration framework
    • Set up a stabilisation program
    • Launch communications, including announcement of the deal

  • Define Migration
    The organisation defines the integrated environment and how the organisation will migrate to it.
    • Map and analyse current environments to determine target environment
    • Estimate overall work effort and budget required
    • Establish integration sequence and timeline
    • Determine high-level approaches for human resources, customers, lines of business and technology

  • Execute Integration
    The organisation conducts the migration to the integrated environment.
    • Perform detailed design, development and testing of the target environment
    • Communicate the target environment to employees and conducting training
    • Communicate to impacted customer segments
    • Convert to the target environment
    • Prepare for post-implementation stabilisation and support

Convergence

(Extracts From: Andersen Consulting - http://www.ac.com)


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