Definition of post-merger integration
The period that starts at the closing of a deal but which can last from a few months to a number of years. The post-merger integration is the time in an acquisition when all of the operations of the target company are absorbed into the buyer. If the deal was structured as a merger, then this is the time when the operations of both legacy companies are combined.
The post-merger integration should first be discussed before the deal is even announced. The Spanish banking group, Grupo Santander, is one of the companies that do post-merger integration consistently well in their acquisitions.
They meet the target companies’ management to plan the integration even before the deal is announced, if possible, and more intensely soon after announcement.
For example, when they purchased UK-based Abbey National in November 2004, in a deal that had been announced in late July the same year, they embarked on an intensive 100 day post-merger integration plan focused on cutting costs: headcount reductions and a new, much tighter, cost management and procurement procedure.
In addition, they immediately embarked on a multi-year plan for the move of back-office systems to Santander’s main site and to implement new sales techniques in the UK.