[Jihad Saadeh]

I believe that a two-step M&A strategy (acquire first, merge later) offers entities a pragmatic and flexible alternative to immediate post-acquisition integration.
This flexibility enables the acquirer to gain a deeper understanding of the acquiree’s business operations, thereby reducing risks, enhancing outcomes, and allowing for effective adaptation to changing environments.
The success of this strategy depends on strong leadership to fully grasp both strategic as well as human and cultural factors, to get a deep understanding of both the strategic rationale and human factors involved. Aligning businesses, quantifying value creation, and identifying cost synergies without disrupting the business, are essential for effective PMI and long-term value in nowadays complex global markets.

[Nicolás]

This is a good strategy and depends on the industry and geography. I believe this strategy works really well when M&A are done in different countries.
Prior to this, a complement to the two step is to acquire a non-controlling interest in the company. This is so the acquirer company can analyze the inner workings of the company before fully acquiring the target.

[John Grancarich]

This can absolutely be an effective strategy, but I would encourage the acquiring company to think carefully about the future integration & how to properly set expectations on that with the new team are important. If this is not done, it can be very easy for the acquired company to believe that ‘everything will stay the same’ when of course it will not, making the future merge more complicated & time consuming.

[Amanda David]

I like the idea of a two-step M&A strategy, especially when the first step is about stabilization rather than optimization. In practice, I’ve seen issues when companies rush straight to synergies before the organization has clarity on decision rights, leadership roles, or even basic processes.

Treating the first step as “get the business running cleanly” and the second as “optimize and transform” seems more realistic. It also creates space to learn what actually works in the acquired business before forcing standardization that may not fit.

Curious how others define the boundary between step one and step two in real deals.

[Author]

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