Study after study puts the failure rate for Mergers and Acquisitions at somewhere between 70 and 90 per cent. Of course, every case is different, but, while each failure comes down to a unique set of challenges, communication issues are usually somewhere in the mix.
Too often organisations only think to integrate PR into their M&A strategy when the ink has dried on the deal.
Yet engaging with PR from an early point in the process can be hugely beneficial. A structured plan will ensure the right messages are communicated and reinforced, stakeholder anxiety is minimised, and top talent retained.
With so many deals on the back-burner through 2020, M&A volumes are only headed one way, so here is some advice to keep in mind.
This period involves getting the right team and infrastructure in place and working quickly to prepare for the announcement phase. News of the merger can leak at any point, so its vital PR is included in preliminary discussions to prepare statements and a leak strategy for such an event. The last thing anyone needs during this unnerving time is a last minute messaging scramble, while maintaining relationships with key journalists covering the sector is paramount.
This is an incredibly important stage to the process and the PR team is central to preparing multiple communications tailored to customers, shareholders, external audiences and, importantly, employees. Change is not well accepted by all and company synergies can easily fail if employees are left in the dark at any point. Therefore it’s essential the message and vision is reflected in a consistent and compelling way across both external and internal groups, or problems can very quickly arise.
The pre-close period
More often than not, after the announcement phase, organisations go silent until the launch of their new structure. This is a fragile point of the process however, when customers start looking to your competitors and employees consider their departure, so ‘going dark’ is an error – one which can be easily rectified through strategic PR. Employees, customers and all other stakeholders should never feel like they’re out of the loop, so keep up your communications with genuine and transparent messages.
The new beginning
Buy outs can be an inherently unsettling process, so it’s no surprise employee related challenges are commonplace on Day 1 of the new structure. To forge success for newly combined organisations, employees need to be well equipped and informed with everything they need to know. Structured internal communications are key to this.
Key changes can continue to occur weeks and months after the legal Day 1, so the work of the PR team does not stop there. It takes time for employees to buy into the new structure and vision, whilst investors and analytics will be looking for proof of the merits of the deal for months to come.
Businesses are often guilty of making the M&A communications plan a low priority due to other pressing needs, but it must not be overlooked. Journalists will want details, and the opportunity to learn more. PRs have the skills, expertise and contacts necessary to navigate all stakeholders through this difficult time. As such, they are vital for the newly formed company’s success.