The Missing Chapter: Why Emotional Buy-In Is Critical For Successful M&A
Published: 30 October 2013
Mergermarket is pleased to present The Missing Chapter: Why Emotional Buy-In Is Critical For Successful M&A in association with The Storytellers. This report surveyed 100 senior executives with experience of the M&A process, focusing on the importance of getting people to buy in to a deal and the role that emotion plays in successful dealmaking.
Highlights from the report include:
- Integrating people and culture is seen as the second most important factor in making an M&A deal a success, behind integrating systems and processes. It was also the factor rated as requiring the second largest quantity of resources.
- 60% of respondents list integrating people and culture as one of the most common reasons that M&A deals are unsuccessful.
- 93% of respondents say that the time taken for an employee to feel emotionally attached to their new organisation has a significant or very significant impact on the ease of integration and level of synergies.
- Early and continuous communication was seen as the most important step to encourage employees to connect emotionally to the new entity.
- 45% of respondents that had been involved in a deal that got the cultural integration wrong said that it had a negative impact on share price.
- For an organisation of 1,000 employees a takeover is likely to result in a cost of £1.3mn from unwanted employee turnover, with this cost rising to £6.5mn for an organisation with 5,000 employees.