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10 tips for avoiding potholes on the road to M&A success

February 27, 2024

Key takeaways from the keynote address at the Merger Integration Management Forum in Amsterdam
Mergers and Acquisitions

Embarking on an M&A journey is akin to going on a highly anticipated road trip. This was the theme of the opening keynote by Joel Andersson, Ericsson’s global head of M&A integration and separation, at the Merger Integration Management Forum in Amsterdam.

Andersson captured the audience’s attention by using a road trip metaphor to describe the M&A process. He was the first to admit he may have pushed the metaphor a bit hard. But we think you’ll agree it helps drive the narrative — pun intended. While his keynote spanned the overall journey, including program management office steering, deal milestones and the various functional cogs that compose the integration engine, the metaphor in its entirety is applicable to the employee experience.

  1. 01

    Not having a clear destination in mind — the foggy windshield dilemma

    The open road beckons, but suddenly, you're driving into fog obscuring a clear view of your destination. In M&A, the fog could be due to:

    • A vague deal rationale
    • Ill-defined sources of value creation
    • Unrealistic expectations on an existing go-to-market model

    Once you have a destination in mind, you mustn’t lose sight of the original reasons for the deal. Not adhering to a clear vision leads to a disoriented journey, risking the success of the entire trip. If the deal team doesn’t know where it’s going, how can they expect functional leaders to create operating models that help the organization achieve its goals?

    Tip: Spend time establishing your vision and sharing it with your stakeholders, ensuring you’re all driving in the same direction. Otherwise, your hazy destination will be your primary source of failure.

  2. 02

    Hidden costs emerging later — the toll booth surprise

    As you speed along the highway, a toll booth looms ahead with a surprise expense you didn't anticipate. Much like unforeseen tolls that pop up throughout the journey, hidden costs in M&A can disrupt a deal. Such unexpected costs may include:

    • Liabilities (pensions, change in control policies and executive clauses)
    • Negative synergies/additional costs
    • Package uplifts
    • Compliance issues

    These unforeseen financial hurdles take a toll on your budget, diverting resources and threatening the financial health of the merged entities.

    Tip: Proper due diligence is important to identify any possible red flags or compliance issues. Make sure to include expert reviews of the impact post-acquisition of high-value items like pensions and total rewards packages.

  3. 03

    Vagueness in the SPA — navigating the contract crossroads

    Every road trip has its share of twists and turns. In the M&A journey, the sale and purchase agreement (SPA) is the roadmap. Ambiguous terms in the SPA are like an imprecise roadmap. Without a clear guide, the journey becomes a risky endeavor, leading to legal detours that could have been avoided.

    An often-encountered issue is around the pension purchase price adjustment. If both parties have a different view on the specifics of the calculations, and the comparability clauses in the employee matters agreement section of the SPA are unclear, you will encounter a potential pothole that could lead to higher costs (also see item two above).

    Tip: Be as specific as possible in the SPA, removing as much ambiguity as possible. Be clear about the assumptions used in calculating the pension purchase price adjustment and which rewards elements are included in the comparability clauses (and what comparable means).

  4. 04

    Unclear communication — all you’ll hear is noise

    Communication is the radio signal that keeps the journey congenial. Imagine driving with a poor radio signal or worse, competing stations drowning out important messages. Unclear or inadequate communication in M&A is akin to this. It erodes trust, disrupts collaboration and leaves employees and stakeholders in the dark, creating a discordant atmosphere that can upend the entire journey.

    Tip: A transaction is a period of uncertainty and great ambiguity for everyone. Be transparent and predictable in your communication. Frequent communication helps ground all stakeholders — even if the message is there’s nothing new to say at the moment. But whatever you do, never say that nothing is going to change. Something will always change, even if it’s a small reporting element.

  5. 05

    Employee representation rights — the passengers rebel

    In this metaphorical road trip, employees are the backseat passengers. Neglecting their representation rights is like ignoring their preferences and needs en route. An unhappy workforce is akin to arguing in the back seat, threatening to derail the ride and distract the driver. Employee discontent can slow down progress, hindering productivity and morale, leading to difficulties keeping and attracting employees.

    Tip: Ensure that you have a good listening strategy in place, both for formal employee representation, but also for those employees who are not organized.

  6. 06

    Appropriate insurance cover on day one — roadside assistance at the ready

    Every seasoned traveler knows the comfort roadside assistance brings. Throughout the M&A journey, having the right insurance coverage from day one is your roadside assistance. It's about being prepared for unexpected jolts and ensuring a safety net that shields against financial breakdowns.

    Tip: In M&A, two types of insurance should be considered. Specific insurance related to the transaction as well as the ongoing insurance contracts. Especially when deals tie over a month or year-end, there’s a risk of a period of self-insurance if the coverage periods don’t match exactly.

  7. 07

    Aligning future total rewards strategy — charting the incentive horizon

    The alignment of reward strategies is like navigating a confusing interchange. Different roads all coming together, with differing heights, breadths and, in some cases, rules of the road. Failing to align total reward structures disrupts a deal much like a confusing interchange disrupts the flow of the journey. Care must be taken to view total rewards integration in the local context to ensure compliance with local legislation (e.g., the acquired rights directive and Transfer of Undertakings [Protection of Employment] regulations). Without a coordinated approach, the merged entities will likely face a talent drain, a major hazard threatening the deal’s success.

    Tip: The alignment and gaps can be identified in due diligence, and planning for the implementation of new plans started. Care should be taken to comply with local legislative requirements, employee representation requirements, the SPA/employee matters agreement and employee expectations.

  8. 08

    Underestimating culture clash — avoid off-roading

    Imagine anticipating merging onto a well-lit and smooth superhighway, only to find yourself on dark, narrow and rocky terrain. Underestimating the clash of cultures is like driving into this unknown territory, filled with organizational dysfunction and resentment, making the road to success treacherous.

    Tip: Culture starts at the top. One way to avoid possible clashes (and identify ways of smoothing the path ahead) is by engaging in a four-way culture assessment. Each party performs a cultural self-assessment and an assessment of how they perceive the other party’s culture. A facilitated discussion (which must be done by a third party to avoid bias) can provide the insights needed and clear the air.

  9. 09

    Believing the myths (and leadership hubris) — it’s just a mirage

    Leadership hubris and myths about the M&A journey are as dangerous as a mirage on the horizon. Believing in the mirage of an easy path or a silver-bullet solution is risky, as much as seeing dangers around every corner. Leaders must navigate the journey with a realistic perspective, putting egos aside and steering clear of illusions that can lead the trip astray.

    Tip: Anticipate key challenges and plan for them. Identify employee concerns through engagement surveys and focus groups. Maintain clear communication channels so that everyone knows what to expect. If people don’t know what’s next, they often assume the worst or make things up.

  10. 10

    Lack of post-deal integration planning — did you pack the right clothes?

    You've reached your destination, and everyone cheers (with relief). But what's next? A lack of post-deal integration planning is like arriving at your destination with a suitcase packed with swimsuits for a ski trip. Without a comprehensive plan for assimilating systems and cultures, the post-deal phase becomes a confusing maze, risking chaos and operational inefficiencies.

    Tip: Start planning for integration in due diligence. Knowing where you want to go with the acquisition is important to ensure the business rationale is sound and allows you to test this throughout the process. Identify the value drivers of the deal early, communicate and track them throughout the integration process, which is often much longer than the traditional 100 days.


All deals encounter obstacles, but ensuring you’re planning ahead and you have the right tools, resources and support along the way can make those obstacles easier to navigate. Keeping the destination in mind throughout the journey and ensuring you’re constantly re-enforcing the reasons for the deal will help ensure all stakeholders remain in their seats and focused on your collective objective, arriving safely at your destination.


Senior Director, Western Europe Leader for M&A Consulting at WTW

Joel Andersson
Head of M&A Execution
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