M&A transactions involve not only a wide range of legal and financial moving parts but also several groups of stakeholders. Before signing any final paperwork, both the target and acquirer firms need to consider how they will share the big news with everyone from employees, customers and partners to vendors and press.
That means creating a comprehensive communication strategy that encompasses these various groups through the stages of the M&A process. By being transparent with everyone involved, both companies will have the best chance of M&A success long after the contract is signed. In this post, we’ll review what this kind of communication strategy should include, how to write one, and best practices for ongoing synergy.
What is an M&A Communications Strategy?
Any major company initiative or change should be shared with everyone who will be affected, and a merger or acquisition is no different. An M&A communications strategy is a detailed plan to impart key information about the transaction to all the relevant parties, including employees, execs, board members, customers, partners, vendors, analysts, investors, and the press. It’s usually a living document that’s flexible enough to handle any changes or evolutions these transactions can bring.
So, why is this type of communication plan so important? A well-thought-out communication strategy can help:
- Clearly communicate the strategic rationale
Why is this transaction a good thing, and how does it help the organizations involved and all the stakeholders, internal and external? How does it fit into the companies’ various strategic initiatives? By clearly communicating these points, you’ll demonstrate solid reasoning behind the decision.
- Generate excitement and alignment
A merger or acquisition is a big deal, and some individuals or stakeholder communities might be skeptical or nervous about what it may bring. An effective communications strategy can counteract these worries and drive enthusiasm for the future.
- Demonstrate transparency and encourage trust
This is especially important for employees of the target company, who may feel the most unsettled by the upcoming transaction. Share as much non-confidential information as possible to show your commitment to clarity and transparency.
- Mitigate risks and distraction
M&A transactions always generate rumors and speculation. Cut down on the spread of misinformation and gossip by communicating specific, verified information early and often.
What to Include in your M&A Communications Strategy
First and foremost is your baseline or core messaging regarding the transaction. This messaging will serve as your “north star” and all communications should tie back to it. You’ll also need to tailor this baseline message to different audiences: customers, employees, partners, vendors, analysts, investors, etc. We recommend including detailed FAQs and resources that these different stakeholder communities can reference (talking points for customer-facing teams, for example) when discussing the transaction.
Remember—a merger or acquisition has implications beyond the initial announcement. Your communications strategy should come with goals and messaging surrounding key moments in the M&A process: the initial announcement, the period from announcement to close, deal close, the first 30, 60, and 90 days, and the integration period. Don’t “set it and forget it.”
What not to include in your M&A Communications Strategy
When building out your internal communications strategy, there are a few phrases you’ll want to avoid. Using these phases, and then communicating messages or actions that are contrary may cause setbacks, confusion and a loss of credibility. These include the following:
- “This is a merger of equals.”
Employees often interpret this to mean that both companies will have an equal say in the integration process and any decisions being made. Even if the intent is to strike a balance, it likely won’t be completely equal—the acquiring firm will almost certainly take the lead.
- “Business will continue as usual.”
Being acquired in and of itself represents change. For each acquisition, the degree of and timing for change will vary. Change needs to be thoughtfully planned and requires consistent and continuous communication. Don’t forget to explain the ”why.”
- “We don’t anticipate making any changes.”
As a business evolves, change is inevitable, with or without an acquisition. The acquisition offers a window of opportunity to make changes needed to integrate the target firm, but also to make improvements across the board.
- ”We have similar company cultures.”
Even if there are similarities, no two company cultures are exactly alike. It is the differences that will get the spotlight, so they will need to be identified and acknowledged. You should also make plans to mitigate potential friction.
- “We plan to leverage the best of both companies.”
While the intent behind this statement may be good, this is a lofty goal that probably won’t be reached. The acquiring firm should be fair and open-minded about adopting processes, tooling, terminology, etc. used by the target, but a true ”best of both” usually won’t be achieved.
How To Build Your M&A Communication Strategy: A Step-By-Step Guide
Whether you’re just getting started on the M&A process or about to publicly share the details,
1.Set clear goals
What do you want your communication plan to achieve? Are you trying to reassure your team, align different company cultures, or explain the benefits of the acquisition? Understanding your goals helps you plan your communication effectively.
2.Know your audience
M&A affects several groups of individuals, from top executives and employees to customers and partners. Knowing who needs what information allows you to tailor your messages to their specific concerns.
3. Create key messages
For each group you’ve identified, develop specific messaging. For example, executives might want to know about the financial benefits of the transaction, while employees might be more concerned about their jobs and adopting new work processes.
4. Pick the right ways to communicate
Different messages are often best delivered through different channels. Major announcements, for example, should come via company-wide meetings or email blasts, while updates on day-to-day changes might be better shared through newsletters or the company intranet.
5. Time it correctly
When you share information is just as important as what you share. Start with general announcements about the merger or acquisition, then provide more detailed updates as things progress. Keep the information coming regularly to avoid leaving long periods without communication.
6. Encourage feedback
Good communication goes both ways. Create avenues (meetings, surveys, anonymous feedback, etc.) for people to ask questions and share their thoughts. This helps you understand how people are feeling and address any concerns that arise.
7. Keep an eye on things
Your communication plan should evolve as the merger moves forward. Keep track of how well your messages are being received and be ready to make changes if necessary.
Special Considerations for Employee Communications
Employees, particularly those of the target firm, require special attention as you share details about the acquisition. Below are three tips for effective communication with this particular cohort.
1.Don't go dark
In the absence of information, people tend to assume the worst. Silence breeds ambiguity and may result in premature attrition. Be as transparent as possible and avoid hard conversations. Don’t be afraid to tell the acquired team when something is unknown, and clearly demonstrate the thoughtful planning and analysis behind decisions. Always follow through. If plans change, communicate those changes as quickly and directly as possible.
2.Maintain the "drumbeat
Many M&A communications strategies come out strong on Day One and then peter out. Make a plan to continue sharing progress reports, company updates, and new processes as the integration stage of the acquisition continues. Use the channels and media that target company employees are already familiar with and receptive to: monthly/quarterly all hands, “fireside chats,” the acquisition page of the company intranet site, email, chat channel, etc.
3.Implement a push-pull communication strategy
Be sure to showcase the benefits of being part of the new organization. Celebrate wins, such as sales milestones, offering announcements, business results, customer feedback, AR/PR highlights, etc. Also, give employees a chance to share their own feedback and positive experiences. Establish channels for submitting questions, recognizing achievements, and shouting out colleagues.
If all else fails, remember the 3 C’s of excellent communication: Clear, Consistent, and Continuous.
Conclusion
In summary, there are five key tips for setting up your M&A communications strategy for long-term success. First, maintain consistency in the style, message, and frequency of your updates to avoid confusion and concern among your team. Second, be honest and share as much information as possible; keeping everyone informed reduces reliance on rumors and builds trust. Third, consider the diverse company cultures being merged; tailor your communications to ensure all parties feel included and valued, and emphasize shared goals and diversity. Fourth, think beyond the immediate aftermath of the merger; plan for continuous communication to support the smooth functioning of the newly combined company. Lastly, stay up-to-date with the latest M&A best practices by following the M&A Science podcast.