M&A: Achieve Seamless Integration by Keeping Key Talent with the Right Incentives

In this article by Décideurs RH, William Berger, Partner, and Thibault Chêne, Director at Eight Advisory, examine one of the most delicate stages of mergers and acquisitions – integration. In this process, one key lever stands out: the ability to retain top talent.

After a sluggish 2023, the M&A market is still struggling to regain momentum, marked by a lack of deals in a tense political and economic climate with particularly uncertain prospects for recovery. So how can we ensure the success of the integration phase when an M&A deal goes through? Here are some answers from the Eight Advisory study How to incentivise for successful integrations?

The study, which was conducted among 92 European companies and private equity funds, shows that most respondents underestimate the importance of cultural integration and change management. As a result, only 40% of M&A transactions in Europe achieve the expected synergies, although 71% of them were initially considered successful.

“Only 46% of the companies surveyed have launched a change management programme aimed at successful cultural integration, taking into account corporate culture, geographical presence and management style,”, explains William Berger.

Successful integration depends on effective people management and retention of key talent, with financial incentives at the center of the strategy (salary increases, bonuses, share awards, earn-outs). A well-structured and clearly communicated earn-out mechanism guarantees a clear integration strategy, as opposed to one-off bonuses, which are less effective. The combination of several incentives proves to be optimal: the success rate of integrations increases from 41% without financial benefit to 71% with one or two incentives and to 84% with more than three incentives.

“The combination of earn-outs, bonuses or share awards – paid on the basis of reasonably ambitious and clearly defined targets – fosters mutual trust and enables employees to remain committed over the long term,” comments Thibault Chêne.

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Read the full article by Caroline de Senneville published in Décideurs RH on January 28, 2025 (content available in French)

Download the Eight Advisory white paper How to incentivise for successful integrations?