Framework: Merger Process Model - Diversification Strategy and M&A
Core Question: What should I plan for and carry out all of the steps involved in merging companies
Key Application Steps:
Approach (M&A strategy, target screening, and due diligence) to ensure value creation and analyze bid premium to minimize “transaction gap”
Execution (transaction execution, integration, and potential divestiture) to handle post- merger structural integration, culture, communications, HR retention, etc. to minimize “transition gap”
Comparisons with other concepts and frameworks:
This tool uniquely applies to M&A, but other tools go into assessment of value creation potential (e.g., resource and capability analysis, competitive positioning, etc.)
Transaction and transition gaps reduce value capture, so the “value stick” applies to M&A
Illustrative Decision Contexts:
All acquisitions
Real world example/HBR Case:
- Comcast & AT&T Broadband
- Deloitte and Accenture on PMI
