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Case: Merger of Two Listed IT Companies

Merger of two listed IT companies

 

Background

Two listed IT companies were due to merge. One of the companies was about three times larger than the other. The transaction was nonetheless structured as a merger among equals.

 

The Project

Before the organizations were merged, Enhancer carried out an audit of the two companies' management teams. The analysis showed that the management team in the smaller company was one level lower than that of the company making the transaction. Normally, in a merger among equals, managers from both management teams are recruited to the new top management structure. In this case, Enhancer recommended the president to staff the top management roles with managers from only one of the companies.

 

Result

The president followed the recommendations. Some of the managers were not in agreement initially, but after a very short period of time, everyone accepted the decision. One year after the transaction, none of the key people from the top management in the acquired company had left the company. The expected synergies were also achieved, and it was a very smooth integration between the two companies.