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July/August 2014

People issues affect M&A transactions more than ever


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As organizations look to M&A transactions to implement global growth strategies, the people issues and associated risks of these transactions have become increasingly prominent. According to 372 HR executives polled in Mercer’s 2013 Global M&A Ready Registration Survey, concerns about top talent leaving the organization and cultural integration vary by geography.

Although Mercer survey participants globally concurred that people issues had risen in prominence in M&A situations, Asia demonstrated the greatest increase in prominence. All surveyed regions reported paying much greater attention to people issues than previously. (See Figure 1.)

Figure 1: Prominence of People Issues in M&A, Compared With One or More Years Ago

Across the board, Mercer’s survey showed significant levels of concern about losing top talent in the 12 months following an M&A transaction, with particular concern cited among Latin American survey respondents. (See Figure 2.)

Figure 2: Level of Concern About Losing Top Talent Within One Year of M&A Deal

When it comes to having processes in place to assess and leverage company culture for successful post- M&A integration, Mercer’s survey revealed significant levels of uncertainty in three of the four regions. More than half of North American respondents cited no process. (See Figure 3.)

Figure 3: Is There a Process for Assessing Culture and Leveraging Results for M&A Integration?

Survey respondents cited company culture as the most neglected issue in M&A deals in Europe (47% citing insufficient attention), Latin America (52%), and North America (46%). In Asia, the largest share of respondents (40%) said talent management, including retention, receives insufficient attention in M&A deals.

Mercer’s M&A experts note that M&A activity poses multiple challenges for companies in today’s global economy, requiring innovative and practical strategies for retaining key talent and integrating organizational cultures. This is especially true for companies in markets where high levels of employee mobility and significant differences in workplace and local cultures make post-deal integration a risky project.

Strategic pre-deal preparation improves HR’s ability to support successful transactions. Addressing the people issues in all transaction phases can ensure that the deal’s strategic and financial objectives are met. 

Mercer’s M&A Ready™ Executive Development Programs are intense two-day working sessions for senior HR executives, corporate development/ strategy/finance executives, and business leaders, held in major financial centers around the world each year. Learn more about Mercer’sM&A Ready workshops for 2014.

CONTACTS

Chuck Moritt (Washington, DC)
Chair, Mercer’s Global M&A
Leadership Group
+1 202 331 5296
E-mail
Ake Ayawongs (Bangkok)
M&A Consulting Leader,
Asia, Middle East, and Africa
+66 2626 8304
E-mail
Daniel Nadborny (Latin America)
M&A Consulting Leader,
Latin America
+54 11 4000 0914
E-mail
Graham Pearce (Munich)
M&A Consulting Leader, Europe
+89 242 68 497
E-mail

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