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
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
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
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