Avoiding a merger malfunction

Amazon announced that it will buy Whole Foods Market this month—a merger valued at $13.7 billion and one that shook up food retailers Walmart and Kroger. AT&T and Time Warner are also in the process of merging for $85.4 billion pending a Justice Department review, and Bayer and Monsanto will join forces for $66 billion if regulatory approval is reached.

One of the largest mergers of all time occurred when AOL and Time Warner merged in 2000 for $160 billion dollars. Then described by Time Warner’s Ted Turner as “better than sex”, the honeymoon lasted only nine years and the separation cost $100 billion.

Although there are many lessons to be learned from such an enormous failure (the combined value of AOL/Time Warner was estimated to be only one-seventh of their worth when the merger occurred), there are some simple takeaways from all mergers and acquisitions.

Marketing and effective communication should play a crucial role in the process. Scheduling meetings early and often between marketing groups from both companies can help employees start on the right foot.

Meetings should cover how branding will be handled and which company will focus on important post-merger aspects such as social media. In the case of Time Warner-AOL, only a select few senior executives were involved or even notified of the merger and when the news finally reached them, few were pleased.

Create a timeline of tasks and expectations hour-by-hour on the first day after a merger occurs. This will assist personnel from both companies in understanding their new or changing roles and what to expect.

Similarly, creating a 100-day plan can help guide employees thereafter and give them a sense of harmony with their new associates, as well as ensure that both companies are maintaining communication to keep branding consistent.


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