After M&As, solid PR leads to solid growth

NEW YORK: A mere 11% of companies involved in mergers and acquisitions measure the effectiveness of their M&A corporate communications plan.

NEW YORK: A mere 11% of companies involved in mergers and acquisitions measure the effectiveness of their M&A corporate communications plan.

NEW YORK: A mere 11% of companies involved in mergers and

acquisitions measure the effectiveness of their M&A corporate

communications plan.



This was the latest depressing example of the industry’s failure to

secure proper funding for research and evaluation of communications, as

revealed in a study by The Conference Board, a New York-based economic

think tank.



The results were drawn from a survey of 88 senior communications, human

resources and PR executives from US and non US companies that have

completed mergers or acquisitions since 1990.



Michele Paige, a Conference Board researcher and author of the report,

attributed this lack of planning and to infrequent time or resources on

the part of corporate communications pros. The report found a somewhat

predictable correlation between successful PR and IR efforts and stock

market performance. ’Communications is the glue that holds the entire

integration together,’ added Paige. ’There was an undeniable correlation

between a company’s communication success during the M&A period and its

stock price one year after it.’



The survey looked at high profile companies like Duke Energy, Lucent

Technologies and Johnson & Johnson. Of the respondents who characterized

their M&A communications campaign as ’successful,’ 60% said their

company’s stock outperformed that of their competitors one year after

the deal, while the 33% of respondents who labeled the campaigns only

’partly successful’ had lesser results.



’What companies need to do from a PR and IR standpoint is hammer home

what a merger means in terms of market share,’ Paige said. ’The

company’s M&A vision, mission and strategy depend upon successful

communication with stakeholders.’



The study also found that successful communications begin at the

top.



The more top management was involved in delivering the communications,

the more likely it was that financial performance, cultural integration

and productivity gains followed.



Still, a major communication problem in M&A transactions centered around

a lack of information being transmitted down to non-management-level

employees.



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