• Steven D’Angelo, Saloni Arora, Christine Janku and Jason Toporoff
  • Published: 09 September 2020

The post-merger integration (PMI) process is one that heavily influences the success of M&A transactions and therefore requires detailed execution. Considerable value in M&A transactions is often lost due to the poor – or even lack of – integration strategy. According to a study published by the Financial Times Press, the failure rate of M&As is more than 50 percent, with 83 percent of companies unable to accomplish the goals of the merger.

In a heightened state of risk aversion in the current conditions, companies can no longer afford to lose such vast synergies. Therefore, as financial services organizations re-engage internal discussions on potential mergers or acquisitions, the approach to forming a strategy should include defining an approach to post-merger integration (PMI), which encompasses the current market sentiment and has built-in assurances in meeting their PMI goals. In the financial services industry, several new trends have emerged, such as agile adoption and dependence on data, among others. The PMI process must continue to evolve by adapting to these trends, and moreover, firms must position PMI at the forefront of the M&A process.

In 2019, the financial services industry witnessed numerous M&A deals take place with an overarching ‘merger of equals’ trend. As 2020 progresses and looks to pick up where the 2019 trends left off, M&A activity will likely increase as a direct result of firms seeking opportunities to rebound from the economic impacts from COVID-19. Through this M&A activity, for firms to truly unlock the maximum value of their deal, they must both incorporate the post-merger integration process early on as well as to adapt their integration strategy to involve industry changes.