The key factors of success for the integration of newly acquired subsidiaries : the case of the cement industry

Abstract

The globalization of the world economy encourages a lot of industries to internationalize. In 1998, mergers and acquisitions were worth approximately $2.4 trillion worldwide. Surveys conducted by consultants and organizations like the IMF are showing a high level of failure during consolidation. There are several risks that should be considered before embarking into the choppy water of M&A. One such risk is the emphasis only on the deal making. Less than 20 percent of the companies had considered the steps necessary to integrate the acquired company into their own organizations. The purpose of this thesis is, in its first part, to identify the common traps that can endanger every acquisition, especially during the integration process. The second part contain a description of the cement industry, and the last one is a personal view of what should be the best organization for an international group, and the key factors of success for the integration of an acquisition.