Poor Post-Acquisition Integration
Assuming that the price paid would allow for an acquirer to create value from a deal, there is still another hurdle to clear: implementation. It goes almost without saying that poor implementation can ruin even the best strategy. In M&A situations, the execution of a sound business strategy is made especially difficult by the complex task of integrating two different organizations. Relationships with customers, employers, and suppliers are often disrupted during the process; this disruption may cause damage to the value of the business. Aggressive acquirers often believe they can improve the target’s performance by injecting better management talent, but end up chasing much of the talent out. Yet it is this very integration that should yield the returns to make the acquisition pay off. Failure to integrate can be as costly as integrating poorly.
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