M&A Integration and Carve-Out Study - Finland

In 2021, we saw a record-breaking number of mergers and acquisitions (M&A) announced. Deal closures receive a lot of attention in the media but there is limited visibility to strategic objectives and integration plans companies have had in connection with M&A transactions and how companies have succeeded in realizing the plans.

M&A Integration and Carve-Out Study in Brief

To gain better insight into the M&A integrations and carve-outs, BearingPoint interviewed 32 companies headquartered in Finland with the target of finding out what have been the most important drivers for the M&A strategy and what are the most important factors for a successful post-merger and acquisition integration. The study gives insights into how companies, which have acquired multiple businesses in recent years, have been able to successfully complete the M&A integrations and what there is to learn from them.

This study is a recommended reading for anyone working within M&A integration processes or corporate M&A function.

Key insights from the study

Our study indicates that market extension has been the main driver for M&A. Digital transformation has also had a key role in the M&A strategies of companies which have made a lot of acquisitions during the past 5 years.

During the interviews, we found that companies with a lot of experience from M&A integrations have proven concepts in place and they succeed in the integration projects, against the general view that integrations would not fulfill their targets.

The most prominent factors we found to be repeatedly present in the companies which have been able to successfully complete their M&A integrations are the following:

The integration planning begins before the closure of the deal. Defining a clear integration end-state target was deemed one of the most important success factors. Adequate resourcing and the top management’s support were also rated among the most important success factors for the integration.
Companies which complete multiple M&A integrations do consider that the deep level of integration is the most desirable.
The hard metrics (e.g., topline growth, cost synergies) are important; however, the success of M&A cannot be measured purely in quantitative measures. The retention rate of acquired employees and customer satisfaction can eventually determine whether the acquisition was successful.
Our research indicates that the more experienced a company is with the acquisitions, the more emphasis is likely to be given to cultural factors already in the pre-closing phase.

Even though most of the interviewed companies were acquirers, the study also indicated that the effort associated with carve-outs should not be underestimated. Especially if the seller is a large corporation and only a portion of the business is included in the transaction, the carve-out and separation can require substantial effort. However, it is worth noting that the respondents of this study have been focusing on acquisitions instead of the sales of businesses, hence the study did not widely capture sellers’ perceptions.