Day One Acquisition Best Practices
Our research found that companies use various strategies and practices during Day One Acquisition or Day One Announcements. Most companies announce the acquisition deal through a press release. On Amazon's Day one Acquisition, Whole Food offered discounted prices on some of their best-selling grocery staples. Dell, on the other hand, launched a new branding called "Dell Technologies".
Best PRACTICES ON DAY ONE ACQUISITION
During the period of acquisition, clear and effective communication should be carried out within the organization to address the employees concerns/issues. The management should anticipate the key issues for each stakeholder group. They should be clear on where resistance is likely to emerge, and plan communication to help employees with their personal transitions. This investment in communication can pay off in significantly higher levels of employee engagement.
Addressing the employees and effective communication plays an essential role to ensure that the acquisition would result to "increased productivity, improved engagement and accelerated value creation."
This practice involves looking into the cultural norms of the company's organization, identifying which cultural norms should stay and introducing the best practice for the organization.
The announcement message should include the basic information and transfer requirements across all communications channels, media outlets and stakeholder groups to establish the awareness and understanding of what the deal is all about and why it makes sense. The messaging announcement should include compelling opportunities for customers, products and, potentially, employees.
The management should clearly outline what will be the changes and what will remain in the company's organization, administrative policies, operational process, and other important aspects of the firm.
This involves anticipating and taking steps to reduce negative impact on the firms market share after the Acquisition announcement. Research shows that companies anticipate and try to reduce negative market reactions by releasing other important announcements or “strategic noise,” around the same time of announcement of acquisition.
A study showed that firms were 482% more likely to announce a significant positive event at the same time they released the acquisition news and 40% less likely to announce a significant negative event.
This involves mobilizing integration immediately upon Day One Announcement to ensure productivity.
Fortune 500 companies
From here we found a list of the top companies included in the Fortune500 companies list for the year 2017. The list includes companies such as Amazon, Walt Disney, Dell and Microsoft.
Below are examples of these Fortune 500 companies on their Day One Announcement.
Amazon’s acquisition of Whole Foods Market
When Amazon acquired Whole Foods Market, the two companies announced in a press release dated August 24, 2017, that Amazon’s acquisition of Whole Foods Market would close officially on August 28, 2017. Additionally, the companies announced that;
Starting the following week, Whole Food would offer discounted prices on some of their best-selling grocery staples across its stores.
In the future, Amazon Prime will become Whole Foods Market’s customer rewards program, providing Prime members with special savings and other in-store benefits.
Whole Foods Market’s healthy and high-quality private label products would be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.
Amazon Lockers would be available in select Whole Foods Market stores to enable customers to ship products.
All the Whole Foods' existing staff received a 10 percent discount on Amazon.com the first week after the merger.
Microsoft’s acquisition of LinkedIn
On June 11, 2017, Microsoft and LinkedIn announced a major acquisition. LinkedIn was to be acquired by Microsoft for an amount of 26.2 billion dollars. LinkedIn’s CEO, made the announcement about the acquisition to their employees through an internal memo. He highlighted each company’s individuality, while also underlining their mutual mission and vision, emphasizing the benefits of the acquisition. He highlighted that the already aligned mission and visions of the two companies would be best fulfilled through this acquisition. The two companies promised to share more about how they were integrating products in the future.
Dell's acquisition of EMC Corporation
On September 7, 2016, Dell technologies had a press release announcing completion of the acquisition of EMC Corporation. As part of the announcement, Dell launched a new branding, "Dell Technologies". On day one of Dell Technologies the company outlined commitment to debt reduction, its primary business group, efforts to gain efficiencies over time and counter rivals, which were already issuing statements about the company.
Walt Disney's acquisition of 21st Century Fox
On December 14, 2017, Walt Disney had a press release announcing the details of the agreement on Disney to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios. The press release discussed important details of the deal including Popular Entertainment Properties to Join Disney Family, Benefits to Consumers, Enhancing Disney’s Worldwide Offerings, and Transaction Highlights.
In summary, some of the best practices on acquisition include effective communication, making necessary changes, understanding the cultural norms of the organization, making sure important information about the deal reaches customers and stakeholders, taking steps to reduce negative impact on the firm's market share and mobilizing integration.
Most companies announce the acquisition deal through a press release. On Amazon's Day one Acquisition, Whole Food offered discounted prices on some of their best-selling items. Dell launched a new branding called "Dell Technologies".