Not so Fast Companies need to pace themselves during the integration process Von Gillis Jonk Erschienen in: Financier Worldwide, Issue January 2006
Prevailing wisdom says speed in a merger or acquisition is essential to success. Integrate quickly or fail. So why do only a few generate real value? Depending on who you talk to, fewer than 20 to 50 percent of M&As succeed. It’s time to rethink our philosophy on merger integration. Speed, unless pursued selectively, may be less an element of success and more a fatal flaw.
Corporate marriages are still vying for headline space. Bank of America and MBNA. Molson and Coors. Procter & Gamble and Gillette. They’re not only competing with each other, they’re up against the legacy of past mergers. HP fires Carly Fiorina in part for failing to integrate HP and Compaq. And although DaimlerChrysler appears to be on the right track, its stock price rallies still put it at just half its pre-merger value. Wherever you are in the headlines, mergers are a risky business.
With a continuing wave of mergers, everyone agrees that success rests with a speedy integration. Weren’t HP’s problems due to miserably slow information technology integration? Isn’t the first task of merger integration to reconcile divergent operating philosophies? Isn’t there a universal threshold of 100 days?
