Post-merger integration fails on the plant floor

By the time a deal closes, the synergy case has been modelled to two decimal places, on the assumption that each saving sits in a clean line item. Almost none of it does. It sits on the plant floor and in the supply base, and inside two operating models that nobody wants to kill.

Where value leaks

• Both operating models keep running because killing one feels risky, although running the two side by side costs more than the risk of choosing.
• Service dips at close and never recovers. A small disruption on Day-1 becomes the new normal, because nobody owns the job of pulling it back.
• Overlapping suppliers stay on and the supply base never rationalises: cutting one touches a live customer programme, and no one sequences the change.

What experienced integrators do

Experienced integrators track each synergy through to cash. When they sequence supplier and site changes, live customer commitments set the order and the integration calendar follows. They also stay in the room through delivery, because the value leaks in month seven, long after the advisers who modelled it have gone.

Integration is the operational half of a deal, so it should be run by people who have run operations. We set up and ran a single integration office for a European parent and its Israeli team, and Day-1 landed on time with no operational delays.

Dov Amar · Opyflow