Mergers and Acquisitions: Keys to an Effective Corporate Narrative

Mergers and Acquisitions: Keys to an Effective Corporate Narrative

In merger and acquisition processes—especially involving public companies—a communication strategy is key to ensuring that the transaction is properly understood by different key audiences, particularly investors, while also safeguarding business continuity and effectively managing synergy capture during this new stage for the organizations involved.

The recent—and still ongoing—acquisition of Warner Bros. by Netflix has brought this topic back to the center of the conversation. Beyond the financial analysis, the case highlights how strategic communication is essential to managing perceptions, aligning expectations, and protecting reputation in real time.

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Having a robust communication process before, during, and after integration has gone from being something “desirable” to an essential element for the sustainable success of the new company.

Although every process is unique, there are 5 key factors that, based on my experience, we should take into account when developing a communication strategy for a merger or acquisition.

1. Compliance and business continuity 

The foundation of any communication strategy and plan in these cases is having clarity on the minimum information we are required to disclose, when we must do so, and to whom, according to the various regulations to which our organization is subject.

From there, we can choose to be more proactive—but not less. Timing must be extremely precise to avoid unnecessary sanctions.

In the case of publicly traded companies, timing is critical to avoid accusations of unfairness toward the investing public. At the same time, we must establish the internal protocols needed to prevent information from leaking prematurely and creating the perception that someone is benefiting from insider information or generating unnecessary uncertainty among employees.

It is also vital for the communications team to understand the risks inherent in the transaction in terms of business continuity, such as the possibility of shutdowns, closures, strikes, occupations of facilities and equipment, or any other disruptions resulting from opposition to the transaction.

2. Communication with employees

The chapter on employee communication in a merger or acquisition process deserves an article of its own.

When rumors begin to circulate and there is no internal communication plan in place, a sense of uncertainty can arise among employees in both companies, threatening productivity, leading to talent loss, and even affecting business continuity.

We must define when, how, with what message, and through whom communication with employees in both companies should begin.

According to Natalia Grande and Miriam Aguado of PEOPLEMATTERS HR, there are four questions we should aim to answer for employees during these processes:

  • What is happening in the company?

  • What are we trying to achieve?

  • What does this mean for the employee?

  • How are we going to do it?

3. “D” day

As Mark Sirower and Jeff Weirens, co-authors of The Synergy Solution: How Companies Win the Mergers and Acquisitions Game, state, the success of a merger or acquisition process “depends on how you announce it.”

According to their research, of 1,267 transactions reviewed between 1995 and 2018, 60% underperformed their peers in the following years, while the 40% that received positive reactions from the investment market after the merger maintained positive results on average in subsequent years.

We should think of the announcement day as something that goes beyond a press release and an analyst call. It should be seen as the climax of the entire merger and acquisition process, a moment in which we must persuade all key audiences of the value of the deal from their different perspectives.

We must build a narrative that is aligned yet tailored to each key audience, so that they perceive the integration as natural, well-founded, and timely; one that creates value and addresses the concerns and fears of each group.

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4. Cultural integration

This is perhaps the most important part for the future of the new organization. The acquiring company may seek to convert the acquired company to its own philosophy and style, or it may prefer to integrate the best of both organizations, but in the end, one culture will prevail.

What kind of cultural integration approach will our merger have?

Conquest style, which seeks to eliminate all traces of the previous culture, much like when the Spanish built temples on top of the pyramids and even used their materials to create a new cultural iconography.
Integrative style, which creates a new culture by combining the best of both worlds.

Either approach will generate a greater or lesser degree of resistance, but defining it is essential for the new organization to endure.

5. Communication within the work team

From the operational standpoint of the team that will work directly on the merger, it is important to keep them informed, aligned, and motivated.

The team should have its own internal communication structure, with dedicated channels and exclusive information flows to ensure that data and decisions move in all directions.

The number of participants will depend on the size and complexity of the acquisition, and the larger and more specialized the team is, the more important it becomes to have communication mechanisms designed specifically for it.

In the case of Warner Bros. – Netflix, beyond the operational and competitive implications, the crucial role that strategic communication plays in merger and acquisition processes becomes clear. From managing the expectations of diverse audiences to ensuring transparency with regulators and markets, the narrative that is built can be decisive in strengthening—or weakening—the perceived value and legitimacy of a transaction of this scale.

Is your organization prepared to communicate a merger or acquisition strategically?
Contact us

At Komunika Latam, we help you turn complex processes into opportunities for leadership and trust.

Fidel Salazar
Consulting Director
fsalazar@komunikalatam.com
LinkedIn: Fidel Salazar

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