Book Description

In this research paper, business post-acquisition integration strategies and structures are introduced and discussed. Concepts are presented to demonstrate and support how formulation and implementation of these strategies and structures will safeguard smooth organisational change that will result in achieving synergy and value creation. Of paramount importance is that the activity of mergers and acquisitions enhances shareholder value and produce sustainable economic growth for the organisation concerned. The aim of this research is not to give an overview or an abundance of examples and data of recent mergers and acquisitions, but rather to present a case study of a dominant South African furniture and white appliance retailer's post-acquisition integration process on assimilating two diverse acquisitions in the audio visual, electronic and office automation retail sector. The outcome is to present thoughts and insights on how the post-acquisition integration process should be organised, managed and implemented. One of the main reasons that value is not enhanced through business integration by means of mergers and acquisitions is the fact that the wrong corporate strategies and business integration strategies are formulated and selected. Another important factor is inadequate post merger management, not capable of handling the integration process and the major changes that take place in the organisation involved in the process. It has been noted in this paper that in order to increase shareholders' value through M & A, a carefully planned and formulated strategy is critical and a proper post-merger management plan / action plan has to be drawn up, put in place, and implemented. The twelve maxims for successful mergers and acquisitions are identified. It is established that M & A should be part of a planned strategic activity and the outcomes of acquiring a company should meet clear and measurable business objectives. Finding the right approach for success is critical to the process. Taking time to fully understand the acquired business properly, making changes at the appropriate speed, acknowledging and dealing with cultural issues, communicating both vertically and horizontally, motivating and rewarding key people in both organisations, and establishing consistent managerial controls and reporting are important issues that need to be addressed and dealt with. If not properly addressed and if the wrong approaches are taken, business integration will fail and value will be destroyed. What can be concluded is that an increase in the value of the parent company through mergers and acquisitions is heavily dependent on the chosen integration strategy and on establishing proper post-merger management to guide and manage the process to its successful end.