Post-Merger Integration (PMI) Best Practices

What is Post Merger Integration?

Post-Merger Integration or PMI is a part of the merger process of two firms where the assets, personnel, and business activities of the two companies participating in the merger are combined. Aspects such as people, assets, resources and technology need to be integrated harmoniously so it’s no wonder the PMI could take anywhere between a few months to multiple years after the merger agreement is signed.

Integration Planning is one of the most challenging areas to address post-merger or acquisition, as the business could face friction as the processes are combined.

Common issues faced during the PMI process

-Loss of market share as competitors go after customers and staff.

-Loss of key talent, as the best and brightest often leave due to uncertainty.

-Dip in productivity and increased costs of transition.

-Disruption, fear and uncertainty among managers and staff.

-Misaligned organisational structures, decision making processes and systems.

-Culture clashes.

-Failure to realise potential benefits of integration, including cost savings.

Key aspects of PMI success:

-Focus on integrating core departments.

-Adequately budget resources for the PMI.

-Regularly evaluate and learn from successes and failures during and after the PMI process.

-Find skilled managers to run the PMI process.

Additional reading about the PMI process:

The 10 steps to successful M&A integration

The Ultimate Guide to Post Merger (M&A) Integration Process

A post-merger challenge: ensuring the smooth integration of disparate IT systems