Mergers and acquisitions are transactional events that occur between companies and businesses. Occurring more frequently than most people think, these mergers and acquisitions are actually more than just a big deal for the companies involved but also for the people within. Stoneridge Partners says that due to the nature of mergers and acquisitions, a lot of things have to change and the transition can actually be a stressful time for many individuals. If you are in a company undergoing a merger or an acquisition, here are some things you might expect. 

What Happens After a Merger or Acquisition

In mergers and acquisitions, some power dynamics exist between the two companies involved and unfortunately, one company has to adjust more than the other. If an individual finds themselves in the company in that situation, here are some pieces of information that could help prepare them for the transition. 

Know the Situation

While it is perfectly understandable for the employees of a company being bought out to worry about their place in the company, knowing the type of situation they are in can help them sleep better at night. Some departments are more vulnerable during mergers and acquisitions than others, especially departments that both companies equally have. 

For example, it might seem redundant for the merged company to have two fully-staffed accounting departments. However, people positioned in unique departments might be able to rest easier as they can be seen as more valuable to the other company. 

Another factor for employees to consider is the nature of the merger or acquisition. Are the two companies exactly in the same field and the other company just wanted to buy out the competition? That situation would be more worrisome for the employees as the other company is probably interested in assets other than the human resources of the company they just merged with. 

However, one possible scenario is that a company can acquire another company to utilize their services and information for their own growth. For example, a media company can purchase a web design company. In this case, the employees can rest easier because the purchasing company wants the benefits of having the whole other company to their control. 

Immediate Silence

While the events leading up to a decision for a merger or an acquisition might seem like it would ramp up to a big thing, it is usually pretty quiet around the companies when the merger or acquisition has been finalized. 

Immediately after the news, things are actually pretty quiet around most offices as they proceed with their daily tasks. However, this silence just doesn’t show how much work is actually going on in the background, especially in the company that is doing the acquiring. On their end, their offices are hard at work going over the other company’s books for decisions they have to make. 

For managers and team leaders out there, this is a crucial time to make sure that your employees and staff feel comforted and eased with an open line of communication. Even though they may be quiet, don’t mistake that for them being okay. Mergers and acquisitions can lead employees to feel uncertain about their job security – a fact that is not baseless. 

Many people know that mergers and acquisitions can lead to layoffs, an unfortunate truth that happens because of a lot of redundancies when two companies (especially when they are in the same field) merge. 

A common strategy used by companies to evaluate their situation is by using the SWOT method. The acronym stands for each factor that the company evaluates to make a decision: strengths, weaknesses, opportunities, and threats. For sure, the company would like to retain staff that bring about strengths and opportunities, while they would be as willing to let go of those who represent weaknesses and threats.

Expect Change

For those who have been fortunate enough to remain in the company after a merger or acquisition, it’s not over yet. They should probably expect some changes to happen around the office. 

One thing to expect is a change in management. Sometimes, the purchasing company can leave the other company alone to go about its business with minimal changes, but sometimes, they do implement a few management changes – especially as a way to have a system to monitor the work of the other company. 

A change in management can put a little tension in an office, especially if they are already connected with their own superiors. 

Another aspect that can change are certain protocols. Companies often do things differently from one another and in the spirit of streamlining all the gears in a machine, the dominant company might impose a few protocol changes to make sure that documents and such can be exchanged from one company to another more conveniently. 

This could be inconvenient to many people who have already become accustomed to how things work around the office. Unfortunately, they must learn to adjust – a very important skill in business.

Employees who have remained might also expect to see changes in their benefit plans. If the result of the merger or acquisition becomes one large conglomerate, then the companies would opt to streamline the employees benefits (e.g., healthcare plans, pension, etc.) to match everyone else’s instead of the company having two different providers. 

Managers and team leaders must set up an open line of communication to make sure to listen to all other concerns employees might have.

Conclusion

While many things can be said about what happens after a merger or acquisition, the gist is that a lot will happen. Many things will happen to both companies involved and some employees might find themselves in more unfortunate situations than others. For most people involved, the best thing they can do is simply calm down and wait for further notice.