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Undoubtedly, mergers are an extensive and complex affair. Mergers are primarily a fusion of two or more business cultures, policies, and environments. It is a known fact that a majority of mergers are


Undoubtedly, mergers are an extensive and complex affair. Mergers are primarily a fusion of two or more business cultures, policies, and environments. It is a known fact that a majority of mergers are unsuccessful because of their poor post-merger reorganisation strategies. Baker Mackenzie[1] has correctly stated, ‘Closing the deal is just the beginning’. Post-merger integration (PMI) simply means the integration of the business operations, organisation structures, technologies, and resources to capitalize on the industrial benefits. In any PMI it is paramount to capture the importance of generating synergy between the merged companies.[2]

Positioning PMI in the M&A lifecycle

M&A is methodically carried out in stages, and PMI is the last stage in the completion of an M&A lifecycle[3]. Remarkably, despite being the last stage, the preparation of PMI should be started in the beginning along with the due diligence stage. This gives time to both, merging companies and acquiring company for synergies, ensuring that desired management structure and control are put into place for uninterrupted workflow.

Pre-requisites for a successful PMI

Fundamentally most mergers and acquisitions fail in the effective implementation of their integration strategies, or they adopt a slow integration strategy. The phrase ‘well planned is half done’ falls true in most M&A cases. The critical part of ensuring a smooth transitioning M&A is the formulation of advanced integration strategies. Timely implementation of business strategies is equally important to avoid the wastage of any resources.

Following are some pre-requisites for a successful PMI:

Legal Requirements: Any company’s legal obligations are directly proportional to its debt structure, distribution channel, supplier and labour relations, compliances required under corporate law and controlling regulations. Mergers have stringent due-diligence guidelines, the new or changed management is answerable to statutory bodies like RBI, SEBI, the Stock Exchange, etc. The documentation presented before such authorities need to be sophisticated and exhaustive, all rules, regulations, orders and guidelines have to be complied with expeditiously. [4]Since, this is a time-sensitive and comprehensive task, indolent behaviour by top management can lead to unsuccessful PMI.

Combination of operations: This is a fairly technical aspect of any PMI strategy. A newly merged company will definitely find it challenging to integrate two different technological systems. Technical integration can never be haphazardly planned or implemented. This step involves the integration of production processes, sharing technical know-how, managing engineering requirements, and securing product designs and plant layouts among other things.[5]

Financial Restructuring: Financial restructuring mostly involves cleaning up the balance sheet of the merged entity. Costlier fundings are replaced by cheaper borrowings, the entity’s assets and capital base are re-evaluated, and reserves are reallocated to advance the merged company’s objectives and improve the organisation’s effectiveness in managing business operations. Financial restructuring is the top-level management’s task, accordingly, the top-level management and their roles may also be evaluated and restructured to prioritize company growth.

Corporate planning and control: Corporate planning at this stage of PMI is future-oriented and management control is exercised to identify deviations from planned targets, predetermined standards, and prescribe corrective actions as remedial measures. A few industrially used controlling techniques are performance budgeting, Programme Planning & Budgeting System (PPBS), Programme Evaluation and Review Technique (PERT), and Critical Path Method (CPM).[6]

Examining human and cultural aspects: Any successful PMI demands strategic planning which is sensitive to human issues of the organization. It is vital to make dedicated efforts to retain key managerial personnel and communicate new policies and procedures especially related to job performance, termination, etc.[7] Employees must be sufficiently trained and familiarised with new technological systems to bridge productivity gaps.

Approaches to PMI

These approaches represent different strategies companies may choose during post-merger integration. Selection is company-subjective and depends on various factors such as strategic objectives, the desired level of integration or autonomy, industry dynamics, and organizational cultures.

The below-mentioned approaches are most effective for successful PMI:

Preservation: The preservation strategy is useful when organizations have unique distinctiveness and are independently capable of collaborating. Given the distinctive personalities, the emphasis is on preserving the individual identities, operations, and cultures of the merging companies.[8]

Holding: This approach entails the creation of a new parent entity (holding company structure) which owns the merged entities yet allows them to operate as separate subsidiaries. [9]Subsidiary experiences controlled autonomy, it gets to retain its own management, operations, and identity while benefiting from shared resources and strategic guidance from the holding company.

Symbiosis: Symbiosis refers to a cooperative and mutually beneficial relationship between the merging companies. In this approach, the companies integrate their operations, systems, and processes to achieve synergies and maximize the value created from the merger.[10] The focus is on leveraging the strengths of both organizations to create a more competitive and successful entity.

Absorption: Generally, the acquiring company completely absorbs the operations, systems, and processes of the merging company. Business operations are fully integrated and the acquiring company assumes full control and ownership.[11]

Measuring PMI Efficiency

Unarguably the criteria for a successful M&A will differ in different industries based in different countries. However, the bedrock of measuring PMI efficiency can be based on the company’s increase in size, coupled with growth in profit, ability to pay dividends and the company’s history.[12] Alternately, other key indicators for measuring PMI efficiency are analysing the financial outcomes by measuring revenue, costs, capital investments and net working capital. Some other organisational indicators are customer satisfaction, employee job satisfaction and class of change in business operations.

Challenges to implementing PMI

Obstacles in Synergy implementation: Achieving synergies is about identifying them and implementing them correctly.[13] Most M&A transactions completely muddle up the synergy concept by focusing more on the growth numbers and ignoring synergy requirements.

Cultural Issues and Communication: M&A transactions alter business transactions, new systems are introduced, policies and procedures change, and the business environment fluctuates dramatically. Most stakeholders find it difficult to adapt to such cultural changes. Many times people don’t know what is happening and are too affair to speak up, creating communication barriers.[14] Sadly, many times the issue isn’t that people don’t wish to integrate, it is that they simply can’t because of cultural issues and communication barriers.

Employee Management: Employees are indispensable to the working environment. Yet, many M&A transactions result in valuable employees and senior management staff leaving the organisation due to associated issues.[15] High employee turnover and attrition rates during M&A creates unwanted imbalances.


There is no strict formula for ensuring successful post-merger integration, pre-planned and mediated interaction between the organisation and the resource management is indispensable.  PMI is a dynamic process for every organisation, and visibly the variables are all interdependent. The top management cannot control all the variables, but their job is to guide all variables effectively to achieve synergies in the organisation. Similarly, ensuring successful PMI is a two-way street and the employees of the merging company must willingly follow the management’s vision. PMI is a critical phase that determines the success of a merger and acquisition. A successful PMI makes the entire merger and acquisition fruitful.

Author(s) Name: Kinnari Solanki (Mumbai University (GJ Advani Law College)


[1] Baker McKenzie, Post Acquisition Integration Handbook (Baker McKenzie 2017)

[2] Midaxo, Guide to Post-Merger Integration (Midaxo 2018)

[3] Deloitte, ‘Post-merger Integration’ (Deloitte) <> accessed 17 May 2023

[4] PWC, Success factors in post-merger integration (PWC 2017)

[5] Ibid

[6] Andy Chui, ‘Improving merger and acquisition decision-making using fuzzy logic and simulation’ (2017) 9 (4) International Journal of Engineering Business Management <>  accessed 15 May 2023

[7] The Institute of Company Secretaries of India, Part I Corporate Restructuring Insolvency, Liquidation & Winding-up (Amended till August 2021) 151

[8] Christophe Schwoertzig, ‘PMI Strategy: Preservation, Symbiosis, Holding, Absorption’ (Value Creation Alternative, 02 September 2017) <> accessed 17 May 2023

[9] Ibid

[10] Ibid

[11] Ibid

[12] PWC, Success factors in post-merger integration (PWC, 2017)

[13] ‘Biggest Post-Merger Integration Challenges & How to Overcome Them’ (DealRoom) <> accessed 20 May 2023

[14] Ibid

[15] Ibid