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Acquirers need to remember that competitive pressures that drove the selection of M&A as a strategy to meet goals do not end once an acquisition is announced, and that competitor reactions need to be monitored. Although M&A announcements are public and create uncertainty for customers and employees of combining firms, they clarify what competitors can expect. Competitors often treat the distraction caused by integrating firms as an opportunity. When not bound by restrictions of regulatory review, competitors can immediately plant seeds of doubt in the minds of employees and customers. For example, quality disruptions frequently occur during M&A due to the downsizing of manufacturing capacity and transferring of work to facilities with people unfamiliar with the products or the processes used to produce them.

Employees will typically not know what a merger means for them, let alone be able to answer questions from customers. As a result, competitors will be actively recruiting employees and customers of firms involved with an M&A at the same time that those firms are least prepared to answer external challenges. Informal industry networks that make employees valuable to an acquirer can work against acquirer interests as competitors actively solicit employees experiencing uncertainty. Many employees will get job offers from competitors within five days of an acquisition announcement.86 To the extent that competitors can leverage the uncertainties faced by firms involved in M&A to their advantage, the task of implementation only becomes harder. This challenge can be minimized by carefully monitoring competitor actions following an acquisition's announcement.

Prudent Planning

The amount of time that managers spend after an acquisition announcement to evaluate a target firm and plan for its integration varies. However, with an average time between announcement and completion of approximately 60 days for U.S. firms, the prevailing length of integration planning is probably not adequate.87 Given that regulatory review of announced transactions can take up half of that time, it seems lamentable that coordination is limited to only one month of planning for multimillion dollar combinations. This is even more so when related firms require greater coordination of activities, or when there are particular challenges during integration planning to examine how acquirer and target firms fit together.88 Additional time may also be needed to address any nonpublic information uncovered after the acquisition announcement because any new information is likely to be negative.89 Successful acquirers recognize that prudent planning lays the foundation for the integration implementation needed to create value. A study of the appropriate time frame, based on an examination of the average time to complete acquisitions, suggests that acquirers should wait at least 120 days after an announcement before closing a transaction.90


Although actions taken prior to completion of the acquisition will influence success, implementation is the true test of strategy. Making M&A work is one of the hardest business tasks, and implementation requires active experimentation to ensure that goals are met. When an acquisition is completed, two firms legally become one, yet internal barriers remain and complete integration may be spread out over several years.91 Although initial performance will decline as integration disrupts normal work processes, achieving higher levels of performance depends on the regular review of progress toward meeting desired performance and organizational goals. This requires executives to take the concepts that drove a deal and make them operational realities by shifting from prudent planning to fast execution. Implementation will be facilitated by two tasks: the assigning of clear responsibility for integration management and continuing adaptation.

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