Tag Archives: Details

How Do You Maintain Company Culture in a Merger? Four Suggestions

Situation: A US-based company is in the process of merging with a foreign company. The US company has multiple locations across the US, and there are cultural differences between these locations. The CEO has worked diligently to mitigate these differences. The foreign merger presents new challenges. How do you maintain company culture in a merger?

Advice from the CEOs:

  • Between some of the US locations, there has been a “we make money, but you spend money” perception. How did the company get past this?
    • The company adjusted metrics to demonstrate the contribution of each division to short and long-term profitability.
    • This information was communicated selectively to key opinion leaders within the company.
    • Use the lessons from this experience to plan post-merger communications and protocols that will contribute to team integration post-merger and improve the chances of merger success.
  • Focus on the common vision and interdependency of the teams. This accommodates differences in culture and encourages teams to appreciate each other’s contribution. Use the same technique during the merger.
  • Have lunch with CEOs of other companies that have been bought by foreign firms. Learn how they adapted to the new reality. Ask what worked or didn’t work. Seek specific details of solutions that were developed that could be applicable to the planned merger.
  • Become better educated on business culture in the country of the company with which you will merge. Seek experts who can give seminars to company employees on what to expect and how to work most effectively with workers and executives of the foreign company.

How Much Do You Share with a Potential Acquirer? Nine Points

Situation: A company has been approached by a larger company that may be interested in acquiring them. The prospective acquirer is a current customer. Absent an extraordinary offer, the company isn’t interested in selling. Nevertheless, a conversation could be valuable. How much information about the company should the CEO share now? How much do you share with a potential acquirer?

Advice from the CEOs:

  • The key term here is potential. At this point, there is no commitment, and you really don’t know the other company’s motivation. As you start this process, don’t share confidential details about your plans or prospects, or your pipeline. Just broad information. If things get serious, slowly open the kimono.
  • Make sure that you have an NDA in place covering anything that they ask you to disclose for this possible transaction.
  • Given your current situation, a standard offer probably won’t be appealing, so be open to a creative option.
    • Decide ahead of time what your price is. If they are in the ball park, keep talking.
    • For example, Say you want $XX. Would you be attracted to 50% of that now, 50% later? Under what terms?
  • Put a low valve on future payouts, particularly if you are not in a position to call the shots.
  • Be open and creative. You never know what can happen. You could sell to them now at the right price. Then, if the acquisition doesn’t work out, buy the company back in 2-3 years at a discount!
  • If you get into higher level negotiations, employee retention will be critical. Make provision for this as part of the deal.
  • Hire a disinterested professional negotiator you who you can trust.
  • If things get serious, bring in an investment broker to assist. It will cost you 5% but they are helpful in the negotiation and could bring in competing suitors to up the ante.