Emotional Buy-in Highlighted as a Critical Success Factor for M&A

LONDON, October 30, 2013 /PRNewswire/ --



The integration of people and culture has been rated as one of the most important factors in making an M&A deal a success, according to a report launched today by post-merger integration and culture change specialists The Storytellers ('The Missing Chapter: Why Emotional Buy-In Is Critical For Successful M&A' http://mergermarketgroup.com/publication/the-missing-chapter-why-emotional-buy-in-is-critical-for-successful-ma/# ).

 The report goes on to show that the poor management of this aspect of M&A - and the lack of emotional buy-in by employees - has been highlighted as one of the leading reasons why many M&A deals are unsuccessful.

The research, carried out by Mergermarket, also illuminates the financial and operational cost of getting the cultural aspect of integration wrong, revealing that senior and middle management are most likely to leave an organisation, exactly when strong leadership and commitment is needed the most. And almost half of respondents who had experienced difficulties during the M&A process said that getting it wrong impacted negatively on the firm's share price, with a reduction in productivity, lower-than-expected synergies, low levels of employee engagement and high levels of employee resistance being major consequences.

Highlights of the report include:

• Integrating people and culture is seen as the second most important factor in making an M&A deal a success, behind integrating systems and processes. It was also the factor rated as requiring the second largest quantity of resources.
• 60% of respondents list integrating people and culture as one of the most common reasons that M&A deals are unsuccessful.
• 93% of respondents say that the time taken for an employee to feel emotionally attached to their new organisation has a significant or very significant impact on the ease of integration and level of synergies.
• Early and continuous communication was seen as the most important step to encourage employees to connect emotionally to the new entity.
• Almost half (45%) of respondents that had been involved in a deal that got the cultural integration wrong said that it had a negative impact on share price.

"Our attitudes and beliefs dramatically influence our actions and behaviours, so it's no surprise that the human aspect of integration can make a huge impact either positively or negatively on the success of an M&A transaction," said Alison Esse, Joint Managing Director at The Storytellers.

For further information:    
Alison Esse
The Storytellers
Mob: +44(0)7768-890836

http://www.thestorytellers.com

SOURCE Mergermarket