A few years ago, I wrote an article, “Three Stages of Merger Communication” for IABC’s online newsletter. Recently, I was asked if I had any advice when a merger does not go through. Here are some thoughts, that were originally published in CommPro.Biz.
- How to address any rumors that might be circulating prior to the official announcement that the deal fell through. There certainly will be rumors flying around.
- How to address the company’s future. Management needs to discuss its new road map – will it continue as a standalone or will it search for a new, better partner.
Though this is not an internal communications issue, management needs to also reassure customers, partners, vendors, investors and other stakeholders – as well as current and prospective employees – that the company is stable and has a future. This may be a challenge if the target company had stated during the initial acquisition announcement that a primary reason for the deal was to access the necessary capital to expand. So management will need to find a way to credibly walk back that reason.
- Don’t wait too long to announce that the deal will not move forward. While no company, especially publicly held companies, want to address rumors, management needs to get ahead of the news rather than for it to come from outside. If you wait too long, you’ve lost control of the narrative.
- Be clear on what you’re communicating. Your answer needs to be consistent and accurate. It undermines employees’ faith in management if conflicting messages are offered up by management.
- The almost-acquiring company and the nearly acquired company will continue to have different goals at this point, especially since people may want to point blame to one party or another (which can include management teams, attorneys, bankers, etc.) While communications teams of both companies worked together to prepare for the initial announcement to coordinate priorities, next steps and goals – that almost won’t be the case here. So one company may want to go back to reporters who originally covered the announcement while the other company may want to let the news fade. Ultimately, you need to be professional and act in the best interests of your company.
- There could be lawsuits as a result of the failed deal, certainly from shareholders and possibly from one company suing the other. If there is a lawsuit, the company needs to reassure employees so they don’t get distracted by the lawsuit (and any coverage of that suit) so they can stay focused on the company.
- Internal communications needs to help reassure employees – rather than give them reasons to bolt to another company, which could include the former acquirer. As you develop your communications plan, keep asking: Does this address employees’ concerns and fears? Does it speak to them in a way that seems authentic (as opposed to legalese, which does not reassure parties of either the first or second part).
- Don’t ignore employees (or customers, partners, vendors, investors and other stakeholders) and hope everything will be okay. Now, more than ever, they need to feel that management has things under control and can deliver on a steady, stable future.