When companies want to increase their corporate growth, acquiring or merging with other equal competitors is one of the most used strategies. Although the whole acquisition deal is very significant in itself, the post-merger integration process is vital for the success of the overall contract. With the help of lawyers from the right corporate law firm in Lithuania or the Baltic region, smooth integration can be achieved. But to ensure that everything goes as planned, corporate law firms point out some of the mistakes that companies should avoid doing after merging with another business.
Setting unrealistic expectations during the due diligence phase
Some goals are just unattainable, yet many enterprises still set them up only to be disappointed when they’re not achieved. When these objectives are not met, everyone is displeased: executives are dissatisfied, employees become demotivated. In the end, the firm might even lose its credibility and the trust of the clients.
A way to avoid this is to set sensible goals with the help of a corporate law firm in Lithuania or neighboring countries. Specialists will help determine the risks of various aims and set sensible, achievable objectives for the merger. This way, company owners can maintain momentum throughout the whole post-merger integration process.
Lacking resources to manage the integration process
Many attorneys from corporate law firms note that businesses should start planning every step of assimilation. Before the final contract is closed, both enterprises should prepare for the merge as it poses numerous challenges for such departments as cultural, overhead, IT, financial, sales, and many more. It is hard for staff to quickly adapt to the changes and new responsibilities without a proper plan. If they cannot work together towards a common goal, the integration process will likely fail.
It is recommended to employ lawyers from a corporate law firm (in Lithuania or elsewhere) to provide valuable guidance to the project management and leadership teams of both companies. Planning should start as early as possible.
Failure to retain top employees
Some corporate law firms notice that another important aspect of the deal is talented workers. The success of the integration heavily relies on the knowledge of both companies’ technology, operations, markets, and customers. Retaining it is crucial.
Lawyers advise executives from both enterprises to determine which people are valuable and should be kept during the merge. Retention bonuses might help those employees that are unsure if they should stay after the deal. Rapport also needs to be built with them, so executives should schedule regular meetings with key members to keep them updated.
Lack of transparency of intentions & behavior
As any corporate law firm (in Lithuania or the Baltics) indicates, not every merger or acquisition is mutually beneficial. That is why this process is quite challenging for both sides. Often executives make unrealistic promises they can’t keep to calm their anxious employees.
Lawyers for corporate law firms advise being honest from the start. Setting them up for disappointment is a guaranteed way to lose crucial members from both companies, and it leads to a more difficult integration process. It is best to inform them of possible hardships because it shows that the staff can count on the executives’ candor, reliability, and honesty.
Delay of difficult decisions
Attorneys from a corporate law firm in Lithuania note that although most companies don’t like to openly discuss it, cuts happen very often during acquisitions and mergers. Various projects and teams are re-evaluated or modified, sectors and facilities are combined, and more often than not, certain positions become unnecessary. It is an unpleasant task to lay people off, but delaying such decisions are detrimental to the integration process.
Corporate law firms recommend deciding what needs to be cut during the initial phase of assimilation. This way, cost increases will be avoided, and people won’t be distracted from important tasks.
The post-merger integration process after these types of unions is taxing on both sides. Additional problems, that could’ve been avoided, only make it worse and lower the chances of the overall success of this kind of deal. By sidestepping the above-mentioned mistakes, enterprises can ensure a smooth merger, the retention of top talent and continued profitability.