In today's dynamic business landscape, mergers and acquisitions (M&A) and integrations stand as a gateway to growth, innovation, and increased competitiveness. With firsthand experience, having led the merger and integration of six esteemed companies with a strong heritage and client portfolio spanning over two decades, I can confirm the transformative power of M&A initiatives.

Following the mergers and acquisitions of the six companies, our strategic decision was to integrate these entities into a new organization, introducing a new brand to the market. Today, as we've started the journey to yet another merger, this time a “merger of the equals”—a newly acquired company similar in size and value—we do so armed with invaluable lessons learned from past experiences.

Keep the deal rationale in mind

The rationale behind M&A varies across industries, and it is very important to always keep in mind the purpose behind acquiring the asset as you proceed with its integration.

In my industry (IT services), the main rationale for M&A is twofold: firstly, to grow scale and be more attractive to global customers, and secondly, to facilitate cross-selling among existing client bases. Therefore, the integration needs to primarily focus on designing a joint target operating model. This model should pay special attention to optimizing sales and delivery functions to drive synergy and capitalize on growth and cross-selling potential.

In certain industries like banking, the main rationale is often around achieving aggressive cost synergies. In such cases, the focus is primarily on the speed and simplicity of the integration. This entails minimizing changes to the buyer's operating model, as every month of cost synergies translates to significant value. Therefore, the integration process prioritizes efficiency and streamlining to capture these financial benefits.

In industries such as manufacturing, the main rationale is to realize savings from external spending by utilizing higher negotiation power. In this case, the focus is primarily on consolidating procurement functions and re-negotiating deals with suppliers.

Identify the critical path

Identifying the critical path in big projects like a merger or integration means figuring out which steps are absolutely essential to getting everything done on time. If any of these critical steps are delayed, it can slow down the entire project.

For example, in IT services, the first important steps involve designing the overall plan for how the company will operate, including its new structure and leadership appointments. These activities then enable all functions, like sales and delivery, to efficiently design their respective detailed target operating models.

Be transparent

It is very easy to say that you want to be transparent, but if you truly want to achieve this, you need to be prepared to get out of your comfort zone. That means sharing details of the process and committing to certain milestones.

For example, while it can be comfortable to say, "We are working on brand selection—we will inform you as soon as possible," I've found people typically appreciate clear updates such as, "We have narrowed down our brand options to two: A and B, and we’ll make a decision by the end of November, with an announcement expected by mid-December." Being specific builds trust and keeps everyone informed.

This approach naturally entails the risk of potential delays in case it happens. Partially, this can be mitigated by carefully aligning within the project team to assess the degree of certainty for target dates of key milestones before their announcement. Furthermore, in cases where the delay of communicated milestones still happens, people are typically prepared to understand.

Articulate client benefits

The complementarity of the two companies is usually the core part of the deal rationale. It is important to keep in mind which areas you could enrich your client offerings and showcase to clients that "merger" or "integration" are not terms that they should be afraid of but rather scenarios they can benefit from.

To be specific, in IT services, the complementarity typically occurs in areas such as expertise in specific competencies (e.g., CRM platforms, managed services, etc.). Often, the complementarity is also in coverage of different time zones. For example, in our recent case, our U.S. clients benefit from having a delivery center in Argentina within the same time zone due to the company we are merging with.

In summary, mergers and acquisitions play an important role in driving business growth and competitiveness today. By staying clear on strategy, being transparent, and focusing on clients' benefits, companies can maintain their success and strong market position.

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