Exhilarating—and exhausting. These two words capture how some describe communications during mergers and acquisitions. Messaging to stakeholders, adhering to legal restrictions and positioning for both friendly and hostile deals require consistency amid the turbulence and insecurity of this high-stakes landscape that risks the loss not just of financial value, but also reputations, careers, brand integrity, livelihoods and customers.
Since 2000, more than 790,000 transactions have been announced worldwide with a known value of US$57 trillion, according to the Institute of Mergers, Acquisitions and Alliances. The average merger size is US$384.8 million, the second-highest total value on record, according to Mergermarket. A healthy second-quarter 2019 rise in U.S. mergers is perhaps why 79% of respondents expect the number of deals in the next year to increase, according to Deloitte’s “The State of The Deal: M & A Trends 2019.”
Done well, communication assuages the fears of investors, customers and employees without backlash and a surrender to the rumor mill. Here are seven tips from the pros on M&A communication best practices to enlist trust from stakeholders with transparency and stability, hopefully resulting in full team integration.
If you don’t know, say so
“Not communicating is far worse than communicating that ‘you don’t know yet,’” advises Christophe Van Gampelaere, partner at Global PMI Partners in Benelux, a West Europe economic union. “Align messages across all stakeholders; I do this with a communication matrix, clarifying the communication channel, timing, audience, messages, etc.” says Van Gampelaere, contributing author to Cross-Border Mergers and Acquisitions and Mergers & Acquisitions, A Practitioner’s Guide to Successful Deals, who has worked on more than 50 mergers and acquisitions deals since 2006.
Tell what you can as soon as you can
For public companies, the Securities and Exchange Commission and the Federal Trade Commission govern what you can say when, leaving employees out of initial announcements. “Set off this sense of betrayal with getting the news out quickly to employees,” says Nancy Hobor, senior lecturer in Integrated Marketing Communications in the graduate program at the Medill School, Northwestern University, who has also worked heading communications teams during and after M&A.
Look three years ahead
Map a detailed step-by-step plan from intention announcement to completion. “You can keep all informed at specific milestones,” says Michelle Mahony, senior principal at Daggerwing Group, Omnicom Group’s global change consultancy with offices in U.S., Canada and Singapore.
Employees will be fearful and may quit. “The consequence of not having communications early is loss of business, as clients leave when your people leave,” says Jack Bergen, owner of Bergen Partners, located in New York, and former president of Hill+Knowlton Strategies.
Plan for the cons (not just the pros)
Anticipate worst-case scenarios and opposition questions when preparing communication strategies for mergers and acquisitions —even if all seems noncontroversial, says an agency expert who has worked on more than 3,000 M&A transactions and special situations in 25 years.
Keep leaders engaged in messaging
Wary of jeopardizing the transition, leaders can clam up, says Mahony, who has worked on global M&A projects in banking, healthcare, pharma and manufacturing. “Make sure you bring senior leaders under the same tent and offer monthly updates for leaders to share.”
Don’t underestimate the culture work
The intent of communication is to get the message across, and that is done in different ways in different cultures,” Van Gampelaere says. But culture is not only about geography in global mergers. “Have a clear sense of the cultural differences,” says Mahony, “and a clear vision of what that integrated culture looks like.”
Underlining all these tips is the need to be honest. “Just tell the truth,” says Rick Gould, managing partner of Gould + Partners, and author of Doing It the Right Way 2nd Edition: 13 Crucial Steps for a Successful Public Relations Agency Merger or Acquisition, who recently handled the US$40 million merger of Canada’s Avenir Global with Padilla. “If you’re not transparent, you waste a lot of time and money.”