Cultural Awareness and International M&A

This week took me to Lille in northern France to run a workshop with an integration team working on a cross-border M&A.  Quite a journey to get there as I had to battle through rail strikes both in the UK and  France – but really worth it in the end.  Unfortunately cultural awareness and international M&A are not always looked at together – but they should be.

My client (a long-standing multinational conglomerate headquartered in the US) had recently acquired a Mittelstand German manufacturing entity in the speciality chemicals space and was looking at how the integration team could most effectively achieve the conpany’s goals without alienating the legacy employees.  In a way, this was an unusual engagement for me.  I do lots of post M&A work but what made this unusual was that the client had decided to dig into the cross-border cultural aspects of integration at a very early stage of the process.  Normally clients come to me and say ‘we bought a company in Germany 2 years ago and its all gone really badly wrong since the deal – can you help?’

This particular engagement saw a mostly Belgian integration team tasked with ensuring the parent company realised a return on the investment on an ongoing basis and we looked into a number of different aspects of the situation:

• Typical characteristics of a Mittelstand company
• Potential employment issues
• The significant cultural differences in approach to business between Belgium and Germany
• Effective communication
• Succesion planning
• Etc

I cannot emphasise too much how important the cultural aspects of cross-border M&A’s always are and therefore how imperative it is to run high quality, commercially focused cultural awareness training as part of the process.  If you’ve just spent millions of dollars on buying a business in another country, investing in the cultual knowledge and fluency of the integration team is a must.  Cultural awareness and M&A must go hand in hand.