Merger & Acquisition Deals Boost Shareholder Value Only When ‘Soft Stuff’ is Done Right, According to Gagen MacDonald

The year 2015 is already a blockbuster one for Mergers & Acquisitions, with nearly $1 trillion in global deal value in the first quarter alone. Yet many deals disappoint – over half actually destroy shareholder value. Why? Dealmakers are so focused on the numbers that they may overlook the “people” factors that can interfere with successful strategy execution, such as integrating employees and cultures.

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“In reality, the ‘soft stuff’ is the hard stuff in M&A – and getting these factors right is critical,” says Sherry Scott, Chief Operating Officer and Communication Practice Lead for Gagen MacDonald. “Integrating two cultures is no easy task,” Scott adds. “Eighty percent of employee integration problems can be attributed to cultural issues. Merging companies must take the right steps to help both employee populations come together and perform as one productive group.”

Strategy consulting firm Gagen MacDonald recommends 4 steps to unlock M&A deals’ full potential:

1. Plan for the complexity of the challenge
M&A deals with longer planning cycles are 150% more likely to succeed versus faster-moving deals.

2. Communicate early and often
Delaying communications reduces favorable results by 55%.

3. Create a compelling story for change
Companies that invest in a powerful story grow revenue 4x faster and increase stock prices 12x faster than those that don’t bother.

4. Align and equip leaders as change agents
Poor leadership is the #1 cause of M&A failure.

The accompanying infographic, Getting the Most Value From Mergers & Acquisitions, combines the latest research with Gagen’s own experience in M&A integration.

Sherry Scott is the Chief Operating Officer and Communication Practice Lead for Gagen MacDonald. She has led Fortune 500 client teams to merge companies successfully, shift culture, enact leadership transitions, implement business strategy shifts, support favorable contract negotiations and drive internal brand strategy.

Gagen MacDonald is a strategy execution consulting firm that specializes in employee engagement, culture change and leadership. A certified woman-owned business, Gagen MacDonald has helped numerous Fortune 500 companies such as Coca-Cola, GE and Johnson & Johnson engage their employees and become better places to work.

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