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Our Approach to Post-Merger Integration Success
In short, PMI is one of the most challenging initiatives that a senior executive will ever undertake. To succeed, a PMI must achieve four fundamentally different objectives:
- Maintain momentum in the ongoing businesses.
- Maximize and accelerate synergies and value creation.
- Build the organization and align the cultures to drive the new company forward.
- Use the combined capabilities to advance the company’s competitive position.
In the past five years, we’ve helped major multinational companies complete more than 550 mergers and acquisitions. These M&A deals generated 9% more value for our clients, on average, than the average deal, in large part because of our PMI consulting services.
We help our clients succeed by combining deep industry and business strategy knowledge with comprehensive value delivery capabilities and expertise, thus accelerating and maximizing value creation throughout the deal and the PMI process.
Because no two PMIs are alike, it's hard to develop a formula. But BCG has articulated 12 imperatives for success in a three-phase approach: setting the direction, capturing the value, and building the organization. In the first phase, defining your basic objectives is essential. In the second phase, speed is crucial. And in the final phase, continuous communication ties everything together.
BCG's 12 Imperatives for Successful PMI
Set the Direction
- Start by defining the basic objectives of the integration.
- Rigorously manage the integration as a discrete program, independent of its size.
- Organize integration teams around drivers of value and around target operation model, and appoint leaders from both companies.
- Insist on senior leadership that is committed, credible, and highly visible.
Capture the Value
- Emphasize speed; Use the period before closing to start designing the future company and prepare to capture the value.
- Aggressively pursue synergies according to the integration's objectives.
- Keep the current business strong by involving current customers in the integration process.
- Decide early and explicitly on IT for the integrated company.
Build the Organization
- Design the future operating model early in the process; it may differ from the day-one structure.
- Manage talent by selecting, retaining, and developing the best people.
- Rigorously manage cultural integration and change management.
- Communicate, communicate, communicate! It is better to have too much communication than too little.
Our Client Impact on Post-Merger Integration
PMIs are often treated as a one-size-fits-all process, yet each has its own speed, style, focus, and rhythm. The PMI strategy and process must be tailored to account for those differences. Here are a few examples of BCG’s post-merger integration consulting work with clients on their post-merger integrations:
A massive deal gave rise to an exceptionally complex PMI. BCG structured and managed the program, created full transparency of costs, developed a synergy baseline, and acted as a data broker between the two companies. The discipline paid off. The merger of giants was completed on time and on budget.
The merger of two large regional banks aimed to create the scale and efficiency to invest in critical capabilities. The design of the new organization was a particularly complex and sensitive challenge. BCG developed objectives and principles to guide the design and then helped define the new operating model. By deal close, the combined organization had strong leadership and was positioned to achieve synergies and build new capabilities.
Our Post-Merger Integration Tools and Resources
Synergy Builder by BCG
Synergy Builder by BCG
OrgBuilder by BCG X
Hub by BCG
Hub by BCG
KEY Impact Management by BCG X
- Oursynergy database benchmarks data from hundreds of PMI projects to estimate and validate potential synergies.
- Ourday-one PMI checklist provides a comprehensive list of priorities by function to ensure business continuity throughout the integration.
- Ourculture survey compares behaviors across both entities up front to reduce risk and increase the speed of the integration.
Our Insights on Post-Merger Integration
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