M&A integration: “I hope your firings go really well”

using hr consultants for post-merger reorganization - Kraft/Cadbury example

Layoffs are often a necessary evil of post-merger integration. While some companies handle this ugly task well, many don’t. As layoffs typically occur early in the integration process (when confusion and stress are at fever pitch), it sometimes makes sense to hire HR consultants to help ease the load and prevent missteps.

The Kraft-Cadbury marriage – will it work?

Ah! Love is such a fickle thing. The Kraft-Cadbury merger brings to mind Jane Austen’s Pride and Prejudice. As Elizabeth Bennet spurned Mr. Darcy’s original marriage proposal only to yield to him in the end, Cadbury has finally succumbed to Kraft’s overtures after months of deriding Kraft as a potential suitor (helped by an extra $2 billion for a final offer of over $19 billion). Will this, too, be a classic love story with a happy ending? Or a disastrous chapter in each company’s history?

What role does “cultural fit” play in M&A?

Cadbury Plc, Kraft Foods, and Hershey Company example

t’s not personal, it’s business. The rationale for most mergers is based on classic business theory of strategic fit, discounted cash flow models, and projected growth. As most deal development, analysis and negotiation strategy is outsourced to investment banks, it makes sense that there is a very clinical approach to arranging corporate marriages. However, most mergers fail to live up to their potential because of a critical but difficult-to-define intangible — cultural fit.

This may be a key factor in the 3-way love triangle that is now being played out between Cadbury Plc, Kraft Foods, and the Hershey Company.