1. What Distinguishes Successful M&A from Failed Transactions

The most important insight for communications professionals gleaned from recent mergers and acquisitions is this: while investment banks conduct due diligence, determine the fair market value of companies, and ultimately propose deal terms, and while international law firms draft the takeover agreement or business combination agreement and later submit the necessary filings to regulatory bodies—such as antitrust authorities, ministries of commerce, the EU, or the US Department of Justice—a constant threat looms over every transaction: someone will say “no!” This may sound simplistic, but in every boardroom, supervisory board, shareholder group, works council, political arena, regulatory agency, and even among competitors, there are individuals whose views on the impact of a transaction differ from those of the deal teams. Industry estimates suggest that up to 80% of proposed transactions ultimately fail. The key role for communication teams in any well-planned transaction is to provide credible and persuasive information to all relevant stakeholder groups, building trust, considering legitimate interests appropriately, and above all, ensuring transparency. When a “hidden agenda” is suspected, trust is eroded and the transaction becomes more difficult.

2. Planning Phase

Questions such as, “What benefits will the transaction bring to the involved companies?” “How will competitive positions be enhanced?” “What synergy potential exists?” and “What enterprise value might be created?” are typically at the core of early planning discussions among management teams. Equally important, however, is addressing the potential negative impacts: Which stakeholder groups might be adversely affected? Where are the pain points? Who might derail the transaction? A thorough and honest stakeholder mapping—unaffected by the early-stage euphoria common among deal teams—is an essential component of transaction planning. Often, early and targeted adjustments to the deal structure can prevent later resistance. Communication teams play a crucial role in developing the stakeholder map, as their expertise in monitoring and evaluating external perspectives is one of their core functions, effectively serving as the transaction’s radar.

3. Managing Risks: The Leak

After the initial exploratory discussions have taken place, deal teams are assembled, a war room is established, banks and law firms are engaged (sometimes merely to create conflicts of interest for third parties), and insider lists are compiled, the real risk of a leak—or even a deliberate breach of discretion—emerges. Maintaining confidentiality during a planned transaction is especially critical during the negotiation phase to secure consensus on key issues before any disclosures are made. An early revelation of transaction plans can derail the entire process. To mitigate this risk, communication teams prepare for a three-tiered leak scenario. For unspecified rumors or mere speculation, most companies adhere to a policy of non-comment. Financial journalists and deal reporters are accustomed to this practice, ensuring that relationships and networks remain largely unstrained. However, more detailed rumors and assumptions complicate matters. In such cases, companies often confirm that it is standard management practice to regularly explore a multitude of potentially value-adding market options—even if most of these are not ultimately pursued. Companies can state, “We have nothing to announce,” without intentionally misleading the capital markets. Fundamentally, it is not in a company’s interest to confirm a transaction plan prematurely simply because rumors have surfaced. Only when a market rumor proves substantially accurate, the likelihood of the transaction exceeds 50 percent, no delaying tactics have been implemented on the company side, and the event is likely to impact the stock price, does a legal obligation arise to disclose information to the capital markets in order to avoid information asymmetries and insider trading. In such circumstances, companies are required to announce the plans through an ad hoc disclosure.

4. Communication Planning

A critical task for the communications team is to craft the narrative for the transaction and, in the case of a friendly merger or acquisition, to align this narrative across the involved companies through a one-voice strategy. In a hostile takeover, however, the narrative naturally takes on a more confrontational tone, matching the more aggressive exchanges at the management level. This narrative is often supported by commissioned economic and legal opinions or by external experts whose perspectives are of interest to the media. Communication with the capital markets (Investor Relations) plays a decisive role during the negotiation phase. Regardless of the deal structure (e.g., cash deal, share deal, or tender offer), shareholders must be convinced. Many companies have promised substantial cost and revenue synergies, which carries two drawbacks: labor unions and works councils often equate “synergies” with “job cuts,” and the more ambitious the synergy promises, the stronger the resistance from employee representatives—especially on boards with equal representation for employees. Additionally, capital markets expect that the promised synergies will be fully realized within three years of closing, and any deviation from this expectation risks undermining trust between management and the board. Therefore, the transaction narrative should avoid hyperbolic or exaggerated claims—particularly regarding statements that could imply a market-dominant position, such as “The deal will create the world’s leading house of…” Such formulations are scrutinized closely during antitrust reviews. A well-crafted narrative focuses instead on enhancing the likelihood of broad social acceptance of the transaction.

5. Managing Risks: The Counteroffer

Just when the intended transaction has been negotiated, the takeover agreement or merger agreement has been communicated, and all stakeholder groups as well as the capital markets have been comprehensively informed in accordance with legal requirements, an unexpected counteroffer from an external company—the “interloper”—may emerge. For well-connected communications teams equipped with comprehensive monitoring systems, such counteroffers are often anticipated and become apparent in advance. At this juncture, two fundamental questions arise: Which corporate combination creates greater value, considering the interests of shareholders as well as those of customers, employees, and the broader market? What premium does the interloper offer, and what synergies can they generate? Another crucial factor is whether a breakup fee—a percentage of the transaction value, which can amount to a multi-million-dollar sum—has been agreed upon in the deal terms. This fee can sometimes dampen the appetite of potential interlopers. Often, such counteroffers lead to bidding wars that can drive up the valuation of the company being sold, while valuation periods specified in the takeover or merger agreement precede any public disclosure of the transaction plans. Sound communication planning, therefore, must include preparation for such scenarios with all the appropriate messages and statements.

6. Approval Process – Phase I

Many deal teams celebrate the signing of the takeover agreement between companies as if the transaction were already nearly complete. In reality, this is only the first milestone on a much longer journey. Obtaining all the necessary regulatory approvals (“merger control”) is a complex process, and many transactions have been blocked by authorities. Initially, antitrust authorities in every country where the companies operate and maintain legal entities must be involved—even in large multinational corporations, this can mean dealing with a double-digit number of authorities. Within the EU, the European Commission is responsible. Every transaction with an EU dimension must be notified to the Commission (DG Comp) prior to execution. A simplified review is possible if the merging companies do not operate in the same or related markets or if they hold only minimal market shares. Following notification, the Commission has 25 working days to examine the transaction in Phase I. The Commission keeps the merging companies updated on the progress of its investigation, typically holding a “state-of-play” meeting near the end of Phase I to communicate its preliminary findings. All such decisions are published on the Commission’s website (https://competition-policy.ec.europa.eu/mergers/latest-news_en).

7. Approval Process – Phase II

When market share thresholds are exceeded, the Commission conducts a more comprehensive review. The definition of the market plays a central role in this process. In a “Phase II review,” the impact of the proposed merger on competition is examined in greater depth, which requires additional time. Phase II is initiated if the Commission has concerns that the transaction could significantly restrict competition in the internal market, typically involving more extensive information gathering—including internal company documents, comprehensive economic data, detailed questionnaires for competitors, and/or on-site visits. Once a Phase II investigation is initiated, the Commission has 90 working days to render a final decision regarding the transaction’s compatibility with EU merger control regulations, although this period can be extended under certain circumstances. If the Commission is concerned that the merger could substantially harm competition, the merging companies may propose remedies—specific modifications to the transaction designed to preserve market competition. Remedies can be offered during both Phase I and Phase II. Details of each new filing are published on the Commission’s website and in the Official Journal of the European Union, allowing interested parties to contact the Commission and provide feedback on the merger. In the United States, clearance requests are submitted to and reviewed by the Department of Justice (DoJ), while the Securities and Exchange Commission (SEC) requires ongoing disclosures, particularly at the time of signing an M&A transaction, during shareholder approval, and upon closing (EDGAR database: https://www.sec.gov/edgar/search/). Generally, companies are advised to remain circumspect during an active review process, as statements regarding the likelihood of approval or attempts to influence the review through public comments or publications can cause confusion.

8. Managing Risks: A Canceled Transaction

Preparing for a transaction demands significant management capacity and incurs substantial planning and project costs. Additionally, internal teams tend to lose focus on day-to-day operations once transaction plans are announced. If a transaction is later canceled—perhaps due to regulatory disapproval—the CEO is often criticized. Shareholders become upset over lost profits and question, sometimes even the board, whether the company now needs a personnel overhaul. The media may openly question whether a CEO whose growth strategy was heavily dependent on the transaction still possesses the strength and standing to lead the company in a new direction. Works councils are frequently relieved by the failure of the transaction and its associated synergy plans, and may be reluctant to give the CEO another chance for a similar endeavor. Meanwhile, direct competitors may try to exploit the company’s temporary vulnerability. To protect the CEO, communication teams take care never to portray the planned transaction as the only viable growth strategy. Instead, the transaction should be presented as a value-adding opportunity that the acquiring company is pursuing from a position of strength—a strength that also allows for a credible standalone position if the deal does not materialize, without calling the CEO’s overall strategy into question. Similarly, communications with key shareholders must be carefully managed. Moreover, it is essential to clearly separate the deal team from the operational management of the ongoing business, emphasizing that those outside the deal team contribute to the transaction’s success by executing day-to-day operations with renewed commitment.

9. Post-Merger Integration

The integration of the merged companies begins on Day One after the transaction closes, although preparations start well in advance. “Day One readiness” involves aligning all systems (e.g., IT, accounting/purchasing systems), as well as the external brand elements (company name, logo, websites) and organizational structures (reporting lines, approval processes) to ensure a seamless transition. The communications team plays a crucial role in internal communications, working to alleviate uncertainties, address concerns, and actively promote team-building across various levels of the newly expanded organization. Tools such as town hall meetings, CEO roadshows, teambuilding events, management newsletters, and integration websites are commonly employed. A particularly sensitive issue is the company name. If the merged entity adopts the name of the dominant company while abandoning the acquired company’s name immediately, employees of the acquired firm often feel a loss of identity, which can hinder the integration process. In such cases, key executives may require retention plans to prevent a loss of expertise. When possible, it is often preferable to create a completely new name for the merged holding company while retaining the legacy names of the subsidiaries, thereby preserving the intangible value (goodwill) of an established brand in the balance sheet.

10. Management Team: The Restructuring

Who will assume which roles in the merged company? Who emerges as a winner in the transaction and who as a loser? Naturally, these considerations affect managerial behavior and must be addressed during the planning phase—whether or not a Business Domination Agreement is in place. It is crucial to avoid situations in which decision-makers inadequately support or even sabotage a transaction. Professionally planned transactions define future leadership teams early on and resolve potential conflicts before they can jeopardize the deal. Formal corporate communications regarding the appointment of management positions (C-level and division heads), however, typically occur later—often at the time of closing the transaction.

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