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M&A AGENT

How do you integrate two businesses after an M&A deal??

Author: Leon Harris

After an M&A deal, the acquired company’s operation and assets must be integrated into the business of the acquirer. To avoid confusion or worse, the integration should generally be completed shortly after the acquisition deal is done within, say 90 days. Here is our take.

Alternatives to an M&A deal:

First we discuss some of the alternatives to a fully-fledged M&A deal.

  • Joint venture (JV): Is a JV better than an M&A deal?  A JV may cost a lot less than an acquisition, but neither side exercises full control.
  • Subcontract arrangement: Is a subcontract arrangement better than an M&A deal? The prime contractor does control the arrangement, but does not control  the subcontractor. 
  • License or franchise: Is it enough to license or franchise out business knowhow in return for royalties, usage fees or franchise fees?  Such arrangements are popular. But they may be less profitable for the party with the knowhow and give that party less control.
  • It is also possible for a single company to develop the knowledge needed on its own, rather than involving a second company with the required knowhow. But this could take much more time – months or years –  and the development process may prove unsuccessful. 

Hence an M&A deal may be much faster and more profitable for the acquirer. And the acquirer gains full control of the acquired business. 

But all this assumes the post M&A integration process is effective and efficient. Read on. 

M&A hoped for benefits:

M&A deals are rarely easy, let’s consider why they are done. M&A deals are typically done for one of three main reasons – sometimes called the “3S” factors:

  1. Scope – increasing sales by increasing capabilities of the buyer;
  2. Scale – increasing sales by extending or improving market share;
  3. Synergies – reducing costs on a combined basis.

Synergies:

There are a multitude of possible post-M&A synergies. Let’s review some of the main synergy candidates.  They may help you conduct and implement an M&A deal. 

  • Purchasing savings: Price discounts and better terms for bigger bulk orders from the combined post acquisition group.
  • Customer cross referrals: Sell complementary products and services to each other’s customers with less marketing and other costs.
  • Marketing savings: Combined marketing campaigns where appropriate may result in cost savings. 
  • Logistics savings: pooled transportation and storage possibilities may result in cost savings.
  • Back-office savings: elimination of double administration expenses. Unfortunately, this may result in layoffs. In some cases, this may be averted by re-training and deploying such personnel, perhaps in other e-commerce related tasks.
  • Other expense savings: one in-house legal department instead of two? One external legal advisor instead of two? One audit firm instead of two? And so forth.

Additional synergy tips:

  • Don’t be over-optimistic or over-pessimistic about synergies. Do your homework and set realistic assumptions in reviews and spreadsheets. 
  • If you are a potential acquirer, consider and track synergies at all stages of an M&A deal – before, during and after the deal. 
  • If you are the potential seller – point out potential synergies at an early stage in any M&A deal as a bargaining chip in price and other negotiations. 
  • Other factors may matter in specific cases.

Alternatives to integration after M&A:

Sometimes, an M&A deal is done but full integration of two businesses may not always be desirable. Instead, separate autonomous “side-by-side” operations may, on occasion, be advantageous. Possible reasons for autonomous operations include:

  • Protect a brand name: where a company’s reputation is based on a particular way of reliably doing business,
  • Antitrust (anti-monopoly) regulatory reasons:  to help show that competition is not being completely eliminated, consumers will retain their choice of whom to buy from. For example, Google acquired Wiz for $32bn in 2025 but will make Wiz an autonomous division. This may help Google obtain antitrust regulatory approval for the acquisition in the USA and elsewhere. 
  • Other players: an autonomous division may continue to do business with other players in the same sector, not start competing against them. This depends on the sector. For example, Wiz may continue supplying cyber protection to

Proceeding with integration:

If it is decided to fully integrate an acquired business with the buyer’s existing business, many aspects need to be planned in advance and well implemented after closing the M&A deal. Some of these aspects are discussed below

Integration players:

Who needs to know of the M&A deal? A lot of people. Employees, customers, suppliers, tax authorities and more.

Integration process in brief:

After an M&A deal, the various operating systems should be integrated, the logos and marketing campaigns must generally be amended. Contracts may need to ne adapted or moved, especially if assets, not shares, of the seller company were sold. Post M&A management and personnel issues must be sorted out. Many other aspects must be attended to at the integration stage.

Therefore, in reality, the integration stage should be planned long before an M&A deal is done, typically during the due diligence or even before then.

Poor integration problems:

Failure to integrate business operations after an M&A deal well can lead to a host of problems. Profit targets may not be met. Any loans taken to finance the deal should generally be repaid out of post M&A profits – otherwise cash flow and working capital issues are likely. 

If the acquirer’s shares are publicly traded on a stock exchange, regular public reporting requirements generally apply. 

To conclude:

Post M&A integration matters – it is far more than an after-thought. Failure to integrate properly can be expensive and embarrassing. 

For more information:

© All rights reserved, 20.5.2026. 

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