Provenu

Yesterday, there was news coverage about DSM - Firmenich. One year post major merger, stock price decreases following strategy update. The stock market sees a decline in DSM-Firmenich shares following strategy update, as reported by FD newspaper headlines. Mergers and acquisitions are complex and unpredictable even when you follow the prescribed steps. Integration is an act of balancing cultural values, operating models and value creation. That is the only way to make it a success. DSM- Firmenich appears to have everything in order and have taken the necessary steps according to what is published. They created an IMO office and a proper day 1 event. Focus on value creation through synergies and introduced a new operating model and new behavioral values. Looking at the market response on their strategy update, following these guidelines and implementing them does not ensure success. From my experience the following pitfalls can have contributed to the decline: * Business cases are frequently too optimistic in order to align the numbers. No matter how great your integration is, it will fail anyway. * Taking efficiency into account when determining the purchasing price. What is the reason for giving up this bonus during negotiations. It has consistently been shown that synergies are harder to achieve looking back. * Excessive concentration on integration: It is crucial for the primary focus to be on managing the companies and daily operations, with integration being a necessary task that should not disrupt daily functions and sales. Are there any additional elements contributing to the lack of success in this integration?   By Branka Dessens Managing Partner at BMLD , Atlantic M&A Partners and Provenu #Mergersandacquisitions #PostMergerIntegration #management #strategy