After the Merger [Textbook Binding]

Fritz Kroger (Author), Michael Tram (Author)

Book Description

Publication Date: February 12, 2000

Mergers are making headlines and prompting questions about which will ultimately succeed and which will fail. The wave of mergers in all sectors continues unabated: petroleum, financial services, telecoms, automotives, accountancy, and even in publishing. Even in an economic downturn, merger and acquisition activity continues to accelerate. However, an A.T. Kearney pan-European study suggests that half the acqusitions fail to achieve their objectives, while three-quarters actually destroy shareholder value. The objective for most mega-mergers is to increase market share and capitalise from the [elusive] "synergies" between businesses while making substantial cost savings via economies of scale. With such a clear objective in mind how come things go so disastrously wrong? Although integration is not without stress for an organization and employees, mergers can succeed if companies develop and adhere to a highly disciplined strategy of adding value on day one while implementing a blueprint for future growth. After the Merger shows how.* This book provides answers about effective integration strategies under merger & acquisition situations * Categorises merger objectives and provides a framework for ensuring the core objective(s) are met * Identifies the seven merger types * identifies the generic "must-do" practices common to any M&A situation * Suggests strategies and tactics for successful merger integration depending on which of the merger types you are in * Offers practical support and advice for senior and middle managers undertaking merger projects * Includes corporate stories and anecdotes and offers a toolkit approach incorporating tips, diagnostics, and how to techniques

Editorial Reviews

From the Inside Flap

A record number of mergers are making headlines and prompting questions about which will ultimately succeed and which will fail. Although integration is not without stress for an organization and employees, mergers can succeed if companies develop and adhere to a highly disciplined strategy of adding value on day one while implementing a blue-print for future growth. Since 1992, Tyco International has acquired and integrated more than 110 companies. We gauged these and other potential acquisitions on their ability to expand our core businesses, making sure that their growth potential would be long-term and sustainable. We have learned that speed is the driver of successful integration, as authors Max M. Habeck, Fritz Kroeger and Michael R. Tram accurately point out. Once discussions have been initiated, we begin making plans for implementation during due diligence. Between the merger announcement and completion dates, we have identified the leaders and developed a one-, two- and three-year plan with them. At Tyco, we implement the short-term integration plan within weeks, which eliminates uncertainties and shifts the focus to achieving growth for the merged companies. While we justify our acquisitions using the cost savings that can be achieved - and achieved during the first few weeks of integration - we are talking about and seeking ways to generate internal growth from the time we begin due diligence. The worst mistake is to leave employees without a sense of the goals and objectives of the merger, so communication is vital. Employee understanding and buy-in are particularly necessary to achieve the early-on reductions as well as growth. You can't just eliminate costs without implementing appropriate incentives and direction for growing the company. Likewise, you can't just provide incentives for growth if you're not going to take out the costs. They go hand in hand for successful integration and shareholder value. Merging companies often get caught up in the details. They must be willing to accept getting 80 percent of it right because integration must happen as quickly as possible. In our experience, you establish the leaders, they take out cost redundancies by consolidating duplicative operations using a best-practices approach, and then you start turning the course for growth, all at the same time. Incentives that reward employees who are willing to take risks and don't penalize failure also further the goals of integration and growth. Incentive systems for good ideas and prudent risk taking are an important part of our culture at Tyco, the major cultural influence we bring to acquired companies. After the Merger offers an especially powerful blueprint on how post-merger integration should be done and reflects many of the merger lessons we have learned. Companies with mergers in mind - no matter what their size - would do well to consider these principles before signing on the dotted line.

From the Back Cover

Open any newspaper and you'll find a story on the latest merger or acquisition. A recent global survey conducted by A.T.Kearney has yielded results comparable with many other studies on the subject. High percentages of all mergers worldwide fail to create value. In some cases they even destroy it.

A record number of mergers are making headlines and prompting questions about which businesses will ultimately succeed and which will fail. Although integration is not without stress for an organization and its employees, mergers can succeed if companies develop and adhere to a highly disciplined strategy of value-adding on day one while implementing a blueprint for future growth.

After the Merger overcomes the vagueness of general, well-intended advice and illustrates case by case, rule by rule, how to be successful when embarking on a merger.

See all Editorial Reviews

Product Details

• Textbook Binding: 146 pages
• Publisher: Financial Times Prentice Hall; 1st edition (February 12, 2000)
• Language: English
• ISBN-10: 0273643541
• ISBN-13: 978-0273643548
• Product Dimensions: 9.1 x 6.1 x 0.3 inches
• Shipping Weight: 1.7 pounds
• Average Customer Review: 3.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #643,594 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

10 of 12 people found the following review helpful:

5.0 out of 5 stars Attention: you can be (in) the next!, October 23, 2000

By 

Gustavo Z. Chicarino (São Paulo, Brazil) - See all my reviews
(REAL NAME)   

This review is from: After the Merger (Textbook Binding)

The word "merger" is one apt to strike fear in the hearts of any employee of a successful company in this era of globalization. No matter in what market you are or the size your company has, it is a possible target (or "source") for a future merger. As it is mentioned in the introduction of this book: any employee will experience at least one merger during his/her working life!

But, being such an important move, why are only 42% of the mergers successful? Why are they so focused on "fit" and "synergy" instead of vision and growth? Why have 86% of the companies failed in communicating their new alliance sufficiently? Why do only 32% of merging companies actively pursue risk management?

Having so many questions in mind, we should ask at least another one: What about the future?

The 3 authors, all top executives of A.T.Kearney with extensive experience in Mergers and Acquisitions (M&A), will not give the reader all the answers but at least show the way. They develop that subject focusing on 7 simple, but effective, rules that should help you steer through a merger a successful integration: Vision, Leadership, Growth, Early Wins, Cultural Differences, Communication and Risk Management. After placing the reader in a hypothetical situation related to each rule, the authors briefly explain it, point some facts they confronted in the A.T.Kearney Global PMI (Post-Merger Integration) Survey and give many examples (more than 40) involving well-known companies which had both successful and unsuccessful attempts in mergers, such as Novartis, Aventis and Exxon Mobil. These examples bring the subject into focus and help the reader understand how the particular rule being explored impacts the post-merger integration. At the end of each chapter, the authors state the rule and give the reader some practical suggestions on how to apply each rule to their own situation.

This book presents a powerful blueprint on how post-merger integration should be done. The seven rules presented confirmed how critical the so called Triangle of Merger Success (Get Buy-in, Provide Orientation and Manage Expectation) is during the post-merger integration process.

I strongly recommend this book to all professionals, especially those who are facing a merger, and top managers, who are/would be responsible for a present/future post-merger integration. It is an easy-to-read book, interesting and the case studies are clear and do not detract from the main thrust of the book.

4 of 5 people found the following review helpful:

1.0 out of 5 stars After the Merger by Max M. Habeck, et al, June 12, 2001

By A Customer

This review is from: After the Merger (Textbook Binding)

The title does not accurately describe this book. There is absolutely no substantial discussion around post-merger integration. I must have been confused by the "After the Merger" title, there is limited value to this book if you are looking for strategies of how to handle merger integration, and little value for other purposes as well. The book describes generalities, for example: it takes the authors approximately 15 pages to relate that mergers should not be focused on cost cutting "efficiency synergies", rather they should be focused on "Growth Synergies". If you already have a basic understanding of merger integration concepts, this book is a waste of your time.