According to the Harvard Business Review, 70 to 90 percent of mergers fail. Key people leave, teams don’t integrate, or employees lose motivation. Alternatively, customers take their business elsewhere, or regulators and shareholders withhold approvals for the transaction.
To boost your chance of success, it is essential to include public relations strategy in your merger planning—regardless of whether you are the acquirer or the target.
Tell a compelling story: Why are you merging? What is your vision for the combined company? What needs to occur for the transaction to succeed?
The answers to these questions will form the key messages incorporated in communications materials. These include the press release announcing the deal, social media posts, talking points to guide executives in media interviews, and the anticipated Questions-and-Answers (Q&A) document that helps management respond to stakeholder inquiries.
And who are those stakeholders?
For publicly listed companies, it is not only your investors. Every group your company faces can play a role in closing the deal and securing the success of the merged company. The narrative surrounding a merger should remain consistent, regardless of whether you are addressing an internal or external audience. If your post-merger plans are not yet finalized, you should at least describe the process you will follow to arrive at decisions.
Use accessible wording. Corporate communication is not the place for legalese (though lawyers should review messaging before it goes out!)
Internal stakeholders
Worker retention is critical, especially in this era of labour shortages. If you fail to communicate what’s in store for employees, uncertainty will lead many of them to submit job applications to your competitors. It is essential to indicate that employees’ services will still be needed post-merger (provided this is the case), that their career prospects may even be enhanced by working in the larger post-merger organization (again, provided this is the case) and that their skills and knowledge were among the principal reasons the merger was negotiated in the first place (once again, provided this is accurate). As much as possible, maintain transparency and manage expectations.
Change can be unsettling, so it is best that employees receive clear and consistent messaging on an ongoing basis. A vacuum of silence will invariably be filled by speculation and rumour, neither conducive to employee morale nor worker retention.
It is essential that your team be advised of the impending transaction prior to hearing about it in the media. In a typical cascading of information, senior and middle management are informed initially, and equipped with key messages and a Q&A to help them respond to employee concerns once the merger is subsequently announced to the rest of the team.
Also, don’t forget to speak with union leadership if your workforce is unionized.
Employee messaging will differ according to company size and culture. Often, employees will receive an early morning email, followed later that day by a town hall meeting, held in person or via webcast. Workers at far-flung plants may benefit from a post-announcement visit from the CEO.
Employee reactions should be monitored, and messaging adapted to allay fears and clarify uncertainties.
External stakeholders
The initial transaction announcement—typically a press release with supporting social media posts—should be supported by targeted external stakeholder communication.
If a party to the merger is publicly listed, a call with stock analysts is typical.
Major customers and suppliers should be contacted individually and reassured that business will continue as usual (or improve).
Both social and traditional media should be closely monitored to gauge reactions and adapt messaging.
Journalists may have questions. Do you respond? If so, who is the spokesperson? Are they bilingual? Have they received media training?
Sometimes, parties to a merger will want to reach out to journalists. Of course, each transaction is unique, and media strategy will depend on circumstances. Legal counsel should be consulted, particularly when parties are constrained by securities law disclosure rules or competition law considerations.
Do not forget to communicate with elected officials. The local mayor or member of parliament does not wish to be blindsided by journalists’ questions on the possible loss of a head office or factory in their city or riding. It is best to reassure the politicians (or at least ensure they possess accurate facts).
Milestones
While the initial announcement is a key milestone in the merger process, the entire timeline is much longer.
Interim period for approvals
Typically, several months pass between the announcement and closing of the transaction, as approvals are sought from shareholders and regulators. While it will likely be business as usual during this time, stakeholders must continue to be updated on a regular basis.
Integration
Once the formal closing has occurred and two companies officially become one, it is time to integrate the operations of the merged parties. This is the make-or-break point in the merger process. Corporate cultures differ, and the distance between them is most effectively bridged through frequent and transparent communication—often from an integration committee, ideally with equal representation from each party.
A successful merger
Clear and consistent communication makes the difference between a merger that succeeds and one that fails. A meshing of corporate cultures cannot be taken for granted. It will only succeed through effective ongoing communication that is mindful of the economic context and the concerns of the full range of internal and external stakeholders.
Are you thinking of buying a business or selling to an acquirer? If so, the experienced pan-Canadian team at NATIONAL Public Relations is available to advise you.
