Far too many business combinations are not successful. There are various reasons for the failure of a transaction and, while hindsight is 20/20, a common reason is failing to plan for post-merger integration at the outset of the deal. Integration of an acquired business becomes more difficult when the transaction crosses national borders and presents cultural differences.
This article discusses the importance of proactively planning post-merger integration in a cross-border acquisition and explains that failure to plan for postmerger integration is a common reason why transactions fail. The article goes on to identify and examine issues that arise when parties to an acquisition have different structures, business methods or cultures, and provides insights and recommendations on how non-US acquiring companies can best structure and negotiate transactions to provide the greatest opportunity for a successful post-closing integration. Key highlights include remembering that:
- The best time to begin successful post-closing integration is during the initial transaction structuring.
- The way a foreign buyer or merger partner negotiates the transaction has a profound effect on how effectively the US company and personnel is integrated after closing the transaction.
- Integration measures should begin at the earliest stages of negotiations, continue well past transaction closing and be the responsibility of both the acquirer and the acquired business.