The global Merger and Acquisition deal value has grown rapidly within Ukraine over the last few years, as an emerging market Ukraine has become a both target of strategic interest for foreign investors interested in expanding into new market, and an active area for internal M&A’s as local companies merge to compete on the global market.

It is expected that the number of deals in Ukraine will continue to grow significantly across all industries, following the current trend set by the financial sector.

Our experience shows that the Integration phase of M&A is one of the most challenging and complex.  Statistics show that 70% synergies are not achieved, and 47% executives leave within one year of merger.  One of the main root causes of failure is the poor post merger management.

Deloitte has a proven and practical approach to assist companies deal with M&A issues.  The Deloitte Post Merger Integration methodology is a key success factor, which helps our clients to mitigate risks of M&A failure.  By focusing on shareholder value and deal synergy realization, organisations that had been supported by Deloitte’s Post Merger Integration team have significantly outperformed relative share price performance of other major mergers. 

Deloitte has deep industry experience of over 150 transactions across the world.  The PMI practice in Ukraine includes multifaceted project experience in different industries.  The key to successful value extraction is the partnership we form with our clients ensuring equal contribution by both parties.

PMI methodology splits tasks in three phases: Blueprinting, Detailed Planning and Integration Execution.

Blueprinting

Blueprinting is the first phase of the Integration process and typically starts before deal is closed.  The objective of Blueprinting is to create framework and vision for the new integrated organisation.  Among key tasks are development of high level organization design and synergy case, setting up integration leadership, and program management.

Detailed Planning

The next phase has primary objective of preparation for ‘Day 1’ by adopting operations and planning changes. After Day 1 merged companies must start working according to new framework set by the Blueprint.  As a result of Detailed Planning integration team develops comprehensive plans for synergies realization and organization change execution.

Integration Execution

Integration Execution is the crucial moment for capturing value from your deal. This stage reveals all errors made by companies when deal synergies and integration were planned. Typically in first 100 days main synergies and transition processes are finished. Key results of M&A integration are normally disclosed to the market immediately and then evaluated by investors and shareholders in terms of share rates and company capitalization.

In order to have successful integration Deloitte recommends set control of following work streams across all integration phases:

» Program Management
» Synergies and Cost Reduction
» Customers, Markets, and Products
» Communications
» Organization and Work Force
» Function Integration
» Location and Facilities

If you would like to know more, please contact Mikhail Mishov, Senior Consultant