What are some ways to overcome cultural mismatch in an M&A?

In class, we learned about M&As. Mergers are when two companies combine, while acquisition is when one company acquires the rights to another company. The reasons why companies participate in M&As, especially with the recent events of pandemic, include:

  • competition and growth
  • acquire competitors to reduce threats
  • develop new capabilities (products, technology, customer bases)
  • synergies (diversify business values and leverage existing capabilities)

However, we also learned that 70-90% of M&As fail. For example, Bayer’s acquisition of Monsanto from the assignment this past week. The obstacles that prevent companies from achieving success includes:

  • cultural mismatch
  • poor integration process
  • overpay for acquisition fees
  • misleading values
  • external factors

Especially with the last assignment we had in the class concerning Bayer’s failure in achieving successful results after acquiring Monsanto, I believe that company culture is very important and should be made a priority by companies. Their different outlooks and approaches in business activities is what I believe is one of the main reasons the acquisition led to unsatisfactory results. That leads to my question, what are some methods in overcoming this cultural mismatch?

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