How do you manage a company merger under the right conditions? What are the mistakes to avoid and the methods to implement? All the explanations can be found in this article.

Generally speaking, a business merger involves pooling the assets and liabilities of two or more companies to create a new one. There are several types of mergers:

• Merger-absorption: this involves transferring the company’s entire assets and liabilities to another existing or new structure. The absorbed company is fully dissolved. The consideration for the contributions of the absorbed company is made by means of contributions of shares in the absorbing company;
• Contribution of shares: this operation is similar to a merger-absorption. Company A transfers its assets to company B. But the company that transfers its assets and liabilities is not dissolved: it becomes a subsidiary of company B, and the shareholders of company A become shareholders of company B ;
• Partial contribution of assets: remuneration is systematically in the form of shares in the acquiring company.

The choice of merger method depends on the accounting and tax interests of each party. Since 2004 and the adoption of opinion no. 2004-001 of March 25, 2004 by the Conseil National de la Comptabilité (French National Accounting Board), mergers have been treated as acquisitions, and the contributions must be estimated at their real value. This opinion aims to universalize merger methodologies on an international level.

In 2016, in The Harvard Business Review, Professor Roger Martin uttered a shocking phrase: “70-90% of mergers are resounding failures.” Why is this success rate so low? It seems that companies always make the same kind of mistakes:

• Blatant neglect of cultural integration;
• Management’s fear of losing responsibility;
• The lack of importance given to middle management, a fundamental link between management structures and the base of the pyramid.

Delegating to an outside manager, who can bring his or her expertise to bear at this complex time, usually helps to resolve many complications. The interim manager, who is not a member of either the purchasing or the acquired structure, brings a global and lucid perspective to this operation, which may have emotional consequences.