We have learned how important cultural fit is to the M&A process. What advice would you give to an M&A buyer who found an interested seller that is strategically strong in all areas except culture? Do you do the deal?
One option would be to consider the deal structure. Perhaps you could acquire certain assets (tech, customer contracts, etc) and not the entire entity. This would allow you to integrate the product/services that you targeted into the buying company’s operations. This would reduce the risk of culture clash.
I would also think about allowing the target company to operate independently rather than trying to roll them into the acquired company. If that’s not possible I’d re-think the M&A given the significant downsides culture can have all other areas of the business post-close.
This scenario reminds me of our lesson material on types of mergers. As mentioned above, a full-on integration might not make sense. Perhaps this is a good opportunity for an OCM program and then again maybe the cultures aren’t as incompatible as first thought. What about the cultures make them incompatible?