Mergers and acquisitions

Last week our Development Director, Richard Carpenter, spoke at a conference titled ‘SME Mergers and Acquisitions’. The conference was held in London and other companies speaking included Lloyds TSB, Grant Thornton and Brandenburg Securities. Topics ranged from acquisition and disposal planning to external communication challenges in the wake of a merger or acquisition (which Richard covered). However, employees were not forgotten in all of this and the presentations also touched on how to manage the ‘people’ factor.

There is a whole stack of research about the percentage of mergers that fail and figures range from 50% to 80%. There are many possible reasons for failure but one of the most frequently cited is the ‘people factor’. In other words, many companies do not have a proper strategy in place to deal with people issues that will, may and do arise. It’s easy at times like this for the focus to be purely on the hard stuff, such as financials and systems. If this all adds up then softer parts of the equation, such as people, can be forgotten.

Internal communication plays an important role in a merger and acquisition situation. If a strategic approach is taken, it can help to retain key people as well as retaining levels of morale and motivation. Whilst more formal communication tools, such as newsletters, intranets and poster campaigns have their place, more informal communication tools such as management by walking around and events that encourage and promote informal interaction between people of the different companies have been shown to have a positive impact on the merger outcome.

It would be great to hear examples of the different communication tools you’ve used in M&A situations, what’s been most effective and why.