Cross Border Integration

Working Across Geographic and National Boundaries

Between 54-80% of acquisitions never achieve thier expected synergies

When working with several companies who are about to, or in the process of merging their interests in terms of merger or a JV, there is an interesting juxtaposition of which culture will lead the new business entity?

Which Culture should predominate?

The answer to the problem is neither culture should predominate - that is unless the stronger partner really does have a dominant high performance culture that will take the newly merged business to the next level.

Poor post acquisition integration results in a Cocktail of Cultures

The usual response is a cocktail of cultures or a mess with no one business taking charge.  Ultimately, a poor integration of two organisation cultures will emerge and the casualty being, the new business entity.  This is a shame when the coming together and merging of business interests does not live up to expectations.

Needless to say, most dealmakers focus on reducing overheads, streamlining logistics and distribution, rationalising products and services, cutting headcount and disposing of poorly performing business units and assets and reducing middle and senior management to focus energies for the future.

Focus is on IT systems working, preferred supplier networks and paying everyone on time.  The dealmakers are so busy getting this right they forget about the fabric that holds the business together - the business culture.

Did you know that between 56-80% of mergers never achieve the synergies for which the merger was intended purely because little attempt was focused on post acquisition integration for the new business entity.

No one wonder so many shareholder groups are wary of large takeovers.  It companies like GE who seem to have got the formula right with few emulators practising their skills.

Okay, that's Difficult - what about across Geographic Boundaries?

Now, consider this position - but factor in a cross border merger where two or more businesses come together from a number of diverse geographies.  How do you integrate them?  The response, with extreme caution!

It's critical that the team bringing the two businesses together has a depth of understanding of working with international cultures.  It is important to understand the radical differences that not all Nationalities portray the same traditions, beliefs, attitudes and behaviours.

Problems arise when different companies merge their interests in different parts of the UK. Who would have thought that - especially when we apparently share the same language!

Genesis Consulting and Stena Line Integration

We worked with Stena Line, when they purchased Sealink.  That work involved regular travel, business and integration meetings and workshops between the UK, Scotland, Sweden, Denmark, Germany, Belgium, the Netherlands, France and the Eastern countries such as Estonia, Russia etc.

Cross Border Mergers require Soft Due Diligence

That was an interesting integration with working practises varying widely between each country even though they were members of the same business.  So it is no surprise to find that cross merger integrations are quite complex and require a great deal of consensus seeking and testing of understanding between cultures and their management teams.

It does not mean that the merger will not work - just that you have to put a lot more energy into the process than you would uniting two businesses from the same country.