M&A Integration: A Product Perspective

Introduction

Mergers and acquisitions — or external growth projects — are widely used by the companies to expand or fortify their businesses. It is believed that in comparison with internal, organic development, M&A are perhaps more expensive, but at the same time, a significantly faster way to grow.

The spectrum of motives that encourage top managers to execute mergers and acquisitions is quite broad, and there is some belief that such transactions are not always based on rational reasons. The 1980s even saw the emergence of a “hubris hypothesis,” according to which the initiators of M&A deals might sometimes be guided by personal ambitions rather than by the interests of shareholders and the company itself. In addition to that, the risks, complexity, and cost of the integration process can cast serious doubt on whether these projects are really justified.

Despite this skepticism, mergers and acquisitions are still used and can be an effective tool for strategic business development in cases where a certain synergy can be achieved — in other words, when the result after the merger is better than the sum of the results achieved by the two companies separately.
Financial indicators will inevitably appear among the project objectives,…